CHAPTER XV 



AGRICULTURAL PRICES AND VALORIZATION 



THERE is lack of agreement among men of affairs and among 

 professional economists as to the factors which actually do determine 

 price, or the factors which should determine price. As to the factors 

 which should determine price there are, roughly speaking, two 

 schools of thinkers, those who incline to the belief that prices 

 should be artificially determined by some social authority, and those 

 who incline to the belief that prices should be left to the play of 

 economic forces of supply and demand. Price history, however, 

 is a more fruitful field to explore at this point than is price theory. 



Do Agricultural Prices Fluctuate According to the Law of 

 Supply and Demand? The demand side of the market is difficult 

 to trace, for the market reports now prove that the demand for 

 staple products is never constant. The supply side, however, 

 may be traced by tabulating the yields for a series of years. The 

 question then resolves itself into this : Do prices go up and down as 

 yields go down and up? Many tables of statistics have been pub- 

 lished on this subject, but the figures collected and published by 

 the federal government are doubtless most widely accepted. 



The following diagram is a reproduction of one prepared by 

 the Bureau of Crop Estimates, and covers crop yields per acre 

 and crop prices for fifty years. 1 This table shows strikingly that 

 prices tend to advance when yields decline, and to decline when 

 yields increase. Ten crops are combined, namely, wheat, corn, 

 oats, barley, rye, buckwheat, potatoes, hay, cotton, and tobacco. 

 Prices and yields of each crop are reduced to their percentage of 

 the fifty-year averages (Fig. 46.) 



Are Agricultural Prices Higher in the Spring than in the Fall? 

 In many popular discussions of the "middleman" particularly 

 in political campaign oratory the middleman is pictured as 

 storing or " hoarding" food supplies in the fall of the year, when 

 they are cheap, and selling them in the spring when prices are high. 

 Or, put in another way, the unhappy farmer must hurry his crop 

 to market as soon as harvested in the fall, in order to pay his 

 debts, and in this manner sells it at big sacrifice in price. Then, 

 the story runs, this same farmer often is forced to buy back part 

 of his supplies in the spring at a greatly enhanced price. 



1 Monthly Crop Report, Washington, February, 1917, p. 16. 

 15 225 



