THE PRICE OF WHEAT 133 



CHAPTER VII. 



THE PRICE OF WHEAT. 

 1. General Remarks on Price Determination. 



It is a common-place that any investigation into the 

 factors determining the price of any commodity should 

 commence with an analytic survey of the conditions 

 affecting the supply of and demand for that commodity. 

 Wheat is no exception to this common rule. The price of 

 wheat is normally determined by conditions of supply 

 and demand in a market which is almost world-wide. 

 The influence exerted by these conditions over price is 

 of both immediate and ultimate importance. Direct 

 variations in price result from variations in supply or 

 demand, while fluctuations in price bring into operation 

 forces which tend to adjust supply and demand to the 

 changes in price. The former variations are immediate, 

 and give rise to market price; the operation of the 

 latter requires a long period, and they exert an ultimate 

 influence, being fundamentally the cause of the transition 

 from market, through sub-normal, to normal price. 



The terms market price and normal price will receive 

 consideration in the forthcoming exposition of the general 

 factors determining the price of wheat. Before entering 

 into this exposition it will be well to call attention to 

 the importance of considering the problem in detail. 



Produced in considerable quantities in almost every 

 country, and consumed almost universally throughout 

 the civilised world, wheat is subject to innumerable 

 factors operating on supply and demand. No other 

 commodity of the same class is produced over such a 



