AGRICULTURAL ECONOMICS 



pected that the price of wheat will vary inversely 

 as the yield in any one country; for the wheat 

 producing countries are scattered widely over the 

 surface of the earth, and the conditions which re- 

 duce the crop in one country may not be present 

 in other countries, and hence a short crop in one 

 country is often made up for by an unusually large 

 one in another country. 



The price of wheat tends to equal the cost of 

 producing and bringing to the central market that 

 portion of the wheat which is produced and mar- 

 keted under the most unfavorable conditions, 

 the competition of crops as well as natural con- 

 ditions being taken into account. This means, 

 simply, that if the intensity of the desire for wheat 

 increases a higher price is likely to be offered for 

 wheat and it will become profitable to extend its 

 culture under conditions where this crop was for- 

 merly unprofitable ; and the tendency is to extend 

 its culture to the point where the costs will equal 

 the price under the most unfavorable conditions 

 of wheat production, which may be interpreted as 

 meaning wheat produced upon the least produc- 

 tive wheat land by the least efficient farmers which 

 are capable of competing in wheat production. If 

 the price falls, some of the land which has been 

 used for wheat production can no longer be used 

 for this purpose with profit. Consequently some 

 of the farmers who at the higher price could make 

 a profit by producing wheat could no longer do 

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