THE PRICE OP WHEAT 155 



6. Influence of the Area of Production on the 

 Stability of Price. 



It is easy to reason a priori, to the conclusion that, 

 ceteris paribus, increased stability of price will result 

 from production over a wide and varied field. This 

 conclusion follows from the fact that the total supply 

 will be more regular and more evenly distributed 

 over the year, when production is large and carried on 

 over a wide field, than when the industry is of small 

 dimensions. Wheat is one of the leading commodities 

 of that group which is produced over an extensive area. 

 Not only is the field of production wide, but wheat is 

 also characterised by the variety of conditions under 

 which it is produced. A temporary suspension of supply 

 from one point in the wide field is, in most cases, 

 counteracted by an abundance from another point. If 

 the Australian supply is diminished by a drought, many 

 circumstances are possible which may counteract any 

 disturbing influence likely to arise from this occurrence. 

 Thus the supply from Canada or the United States may 

 be larger than usual at the previous harvest, or the yield 

 in the Argentine may be sufficient to fill the gap in the 

 supply. Since it is produced in the two hemispheres, and 

 very widely in these, wheat experiences all the variations 

 in climatic conditions which may occur over the whole 

 world. It is highly improbable that a drought would 

 prevail throughout the extent of either hemisphere in 

 any one year, much less in both. Moreover, the growing 

 seasons and harvesting periods vary greatly in different 

 places, so that widely diffused adverse weather conditions 

 would not be universally detrimental. In fact, it is more 

 likely that what in one district is adverse weather, is in 

 another, distinctly favourable. Thus, suppose that 

 country A has continuously damp weather at harvesting, 

 then country B may be fortunate in experiencing such 



