COST PRICE AND COSTS OF PRODUCTION 173 



necessary now (failing rapid progress in intensification) to have 

 further large areas of undeveloped fertile land to fall back upon. 

 However, with the exception of certain parts of Siberia and the 

 tropical highlands, all of which regions have marked disadvantages, 

 such areas no longer exist. Hence the fact that consumption has 

 begun to overtake supply, a fact that became apparent shortly 

 after the year 1900, and has become especially marked since the 

 year 1908. 1 Though various theories have been advanced in 

 different countries to explain the rise in prices since the year 1900, 2 

 there cannot be much doubt that the obvious explanation is the 

 correct one ; shortage of supplies relative to consumption has 

 been the most potent factor. 3 Roughly speaking, between the 

 years 1880 and 1900 farmers throughout the world were producing 

 more animal (and other) foodstuffs than they could dispose of at 

 remunerative prices, 4 while since the year 1900, dealers, if not the 

 farmers, have been more and more able to dictate prices to the 

 consumer. Farmers, as a class, have not, however, reaped the full 

 benefit of the increased prices. 5 Costs of production have risen 

 for all except those who have remained for some time owners of 

 the land they use, and who do not need to purchase feedstuffs 

 extensively. Even those who work under the ranching system 

 appear likely to be affected in the future, if not so already, by 

 increasing costs of production. 6 



The increased cost of production and most of the other supposed 

 independent factors in the rising prices of animal foodstuffs, are 

 ultimately traceable to a reduced rate of development of new land 



1 The recent shortage in meat supplies has been all the more marked, be- 

 cause the productive capacity of natural pastures in certain countries, such 

 as the United States, Canada, Australia, and New Zealand has suffered ; so 

 that more land is required per head of stock. Thus, even if land values had 

 not risen, the cost of production would be greater (see notes 5 and 6 below) . 



8 See Internat. Agric. Inst., Bulletin of Social and Economic Intelligence, 

 April, 1912. 



3 " The upward trend of prices of all classes of meat animals and of meat 

 ... is observable in all countries for which information has been obtained. 

 . . . The general fact is that production has not kept up with the increase 

 of population in some degree, and with the customary demand by meat con- 

 sumers. The inevitable measure of this changed relationship between 

 supply and demand is price. . . ." U.S. Dept. Agric. Kept., 109, p. 152. 



* Cf. U.S. Yearbook of Agriculture, 1910, p. 19." It has been shown 

 that for many years previous to 1897 or later the prices received by farmers 

 were even less than the costs of production." - ^ 



^See U.S. Dept. Agric., Farmers' Bulletin, No. 575 (published 1914), p. 4. 

 ' This unprecedented increase in the average value of meat animals does 

 not necessarily mean that farmers or stock-raisers are making more, if an}' 

 profit. On the contrary, the cost of production has probably increased more 

 rapidly than the increase in the selling price of live-stcck. Complaints of a 

 similar nature were also common in Europe prior to the year 1914. 



See U.S. Dept. Agric., Office of Sec. Kept., 110 ; entitled Live-Stock Pro- 

 duction in the Far Western Range States, p. 5. " The future costs of producing 

 meats on the Western Range areas will certainly not be less, and in most 

 sections will probably increase." 



