10 BULLETIN 9'90 ; IT. S. DEPARTMENT OF AGRICULTURE. 



to help in correcting errors as to the numbers needed. A violent 

 change in the corn crop can thus be quickly reflected in hogs. These 

 and other causes make the hog curve less smooth than the horse curve, 

 but at the same time prevent its moving so far from normal at any 

 time. It is to be observed that the horse curve has a much more 

 violent swing than the hog curve. As already noted, the long period 

 of time before errors in production of horses are apparent allows very 

 great overproduction and equally serious underproduction. 



With annual crops an error in acreage can be corrected the next 

 year. The acreage of crops is, therefore, subject to less violent fluc- 

 tuations than is the number of hogs and much less than is the number 

 of horses. The weather is so much more powerful in influencing pro- 

 duction than is any ordinary change in acreage that the effect of 

 changes in acreage are often obscured. The response to prices is 

 none the less sure. For example, the cotton acreage for 1921 is 72 

 per cent of the 1920 acreage. Such an extreme change in acreage of 

 a basic crop rarely occurs and could only be brought about by an 

 extreme change in the purchasing power of cotton. Ordinarily 

 changes in acreage are much less. 



Because of the cycles in prices a one-year basis of comparison is 

 not long enough. In this bulletin a five-year average before the war 

 is used as a base, represented by 100. Farm prices by months are 

 not available before 1909. For horses even a five-year base is too 

 short for the five-year period before the war was a high-priced period 

 for horses. The base for timothy seed was only four years and in- 

 cluded a year of very high prices. This makes the index numbers for 

 timothy seed too low. 



RELATION OF WAGES AND FARM PRICES. 



When prices suddenly rise or fall wages lag behind, as is shown in 

 Table VI. When prices rise rapidly, as they did in 1863-64 and in 

 1916-17, and wages lag, there is a real high cost of living. The usual 

 quantity of labor will not buy the usual quantity of things. Some 

 form of economy must be practiced. One of the things economized 

 on is food. By changing from animal foods to plant foods, a food 

 supply can be purchased at much less cost, although it is much less 

 satisfying food, and if carried to the extent of denying milk and 

 butter to children, may have very serious consequences. When prices 

 suddenly increase and wages do not, the food habits of a more crowded 

 country are temporarily adopted. The increased demand for plant 

 foods usually causes prices of grains to rise faster than does the general 

 price level and causes those of animal food to rise less rapidly than 

 does the general price level. But grains are used in the production of 

 animal foods, so that the animal producer is confronted with unprofit- 

 able production, but the public discussion turns to the prices of things 



