118 WHEAT PRODUCTION IN NEW ZEALAND 



Zealand is a young country with rapidly changing 

 conditions; and there should be considered other con- 

 ditions besides gross production, as for instance, rapidly 

 changing population or the foundation of new industries. 

 It will be only after an equilibrium has been established 

 and the country passes out of its initial stages of develop- 

 ment that the causes of cyclical changes will be open 

 for study on a more certain foundation. The recent 

 investigation by the Census and Statistics Office into the 

 Cost of Living in New Zealand throws further light 

 on the subject of cyclical fluctuations in agricultural 

 produce in New Zealand. The graph of the combined 

 index number of five home products (bread, flour, oat- 

 meal, potatoes, and onions) , shows a more or less regular 

 period of fluctuation of about four years. This is very 

 clearly shown in a graph which portrays deviations 

 above and below the average of the series. The result 

 is a regular succession of troughs and crests until recent 

 years when conditions have been somewhat abnormal. 

 ' l Roughly, these oscillations above and below the average 

 represent variations in production from period to period, 

 and the regularity with which periods of high and low 

 prices alternate is so striking as to suggest some 

 underlying cause or law, probably connected with 

 production. ' '* 



7. Relation Between Supply and Price. 



If fluctuations in the annual supply of wheat produced 

 in New Zealand are compared with the corresponding 

 movements in New Zealand wheat prices during the 

 last four decades, a tendency to inverse correlation 

 is noticeable. Thus, a year of high prices is almost 

 invariably followed by increased production at the 

 following harvest* Such was the case after the relatively 



*Se "Beport on the Cost of Living in New Zealand from 

 1891-1914. " Pages 24-5. 



