RATIO METHOD OF DETERMINING COST 

 OF PRODUCING HOGS 



THE ratio method of pi'ice determination was first publicly 

 recognized in the United States by the Food Administration, 

 in November of 1917. A commission of seven swine men had been 

 appointed by the Food Administration to determine the cost of 

 producing hogs, and in submitting their report the commission 

 adopted practically without change the ratio method of price de- 

 termination as advocated in Wallaces' Farmer during the summer 

 and fall of 1917. The commission, composed of expert swine men 

 from all over the United States, after a careful technical survey 

 of the situation and consideration of the figures submitted by the 

 author, came to the conclusion that the ratio method actually 

 expressed cost of production more simply and accurately than any 

 other method. 



In its simplest form, the hog producer of fifty j^ears ago 

 grasped the ratio idea. Without any statistical investigation, 

 the swine growers of those days came to the conclusion that they 

 could make money when they sold their hogs for a value per hun- 

 dredweight of more than the value of ten bushels of corn. For a 

 generation or two, hog men looked on a ratio of ten bushels of corn 

 to one hundred pounds of hog flesh as about right, altho they felt 

 that such a ratio might not cover risk. 



From an exact statistical standpoint, take the ten-year period 

 extending from 1907 to 1916, inclusive. During that time No. 2 

 Chicago corn averaged 66.3 cents a bushel, whereas hogs averaged 

 $7.53 per hundredweight. The ratio for that particular ten-year 

 period was 11.4 bushels of Chicago No. 2 corn to equal in value 

 one hundred pounds of Chicago hog flesh. How uniform is this 

 ratio between corn and hogs from decade to decade may be judged 

 from the following table, which gives the ratios as they have pre- 

 vailed year by year for the past sixty years, and the average 

 by decades. The second column shows the number of bushels of 

 corn required each year to equal in value one hundred pounds of 

 live hog: 



