HISTORY OP WHEAT PRODUCTION IN NEW ZEALAND 119 



high prices of 1877-8, 1880, 1887, 1903, to pick out years 

 at random. Similarly, we find years of relatively low 

 prices followed by decreases in the total supply. Thus 

 prices were comparatively low in 1885, 1888, 1893, and 

 1900, and in the following years there is a diminution 

 in production. On the other hand, similar connections 

 may be traced between supply and price, years of high 

 total supplies being followed by years of low price, and 

 vice versa. Typical examples of this are seen in the 

 years 1892, 1899, when production exceeded 10,000,000 

 bushels. 



The connection is more evident from a graph of total 

 supply and average annual price. Index numbers of 

 supply and price with the base period of 1890-99 have 

 been taken, and from these graphs of the two periods 

 have been drawn. Looking at this graph we notice the 

 connection hinted at above even more marked, especially 

 of recent years. With few exceptions a " crest" in the 

 graph of prices corresponds with a " trough" in the 

 graph of supply, and vice versa. It is remarkable how 

 often a "trough" in supply just precedes a "crest" 

 in price, while on the other hand price minima precede 

 supply minima. 



Such generalisations of course are open to exceptions, 

 for supply is only one factor in the determination of 

 price from year to year. In the following chapter price 

 movements will be treated more fully, but this rough 

 correspondence of supply and price movements may be 

 noted here as an important influence determining the 

 fluctuations in supply from year to year. Turning to 

 graphs of supply and price where quinquennial averages 

 are taken over the same period as previously, we notice 

 that the curves frequently intersect and for the most 

 part move in opposite directions. This suggests that 

 there is correlation between supply and price. 



