PRICES OF FARM PRODUCTS. 



17 



farming. If the new ratios continue, the most fundamental changes 

 in types of farming will result. 



Table VIII. — Index numbers of prices and freight rates. 1 



Percentage 

 that 1921 

 price or 



charge is of 

 five-year 

 average. 



Weighted average prices paid to farmers for 31 farm products. 



Wholesale prices " all commodities " 



Pennsylvania crude oil f . o. b. wells, per barrel , 



Anthracite egg coal, f. o. b. N. Y. harbor, per ton 



Bessemer pig iron at Pittsburgh, per ton 



Lake copper, New York, per pound 



Freight 'pates on car loads per 100 pounds: 

 Wheat, Kansas City to Galveston — 



Domestic 



Export 



Corn, Chicago to New York — 



Domestic, reshipping 



Export, reshipping 



Dressed hogs, Chicago to New York 



Five-year 





average 

 June, 1909- 



June, 1921. 



Juiy, 1914. 





100 

 100 







$1.70 



52.625 



4.77 



10. 034 



15.94 



24.71 



.1453 



.1284 



. 355 



.56 



.225 



.45 



.16 



.345 



.13 



.30 



.45 



.965 



105 

 151 

 154 

 210 

 155 



158 

 200 



216 

 231 

 214 



1 Prices of copper and iron as reported by Iron Age. Other prices as reported by the Bureau of Labor 

 Statistics. Freight rates obtained from the Interstate Commerce Commission. 



COMPARISONS OF FARM AND WHOLESALE PRICES. 



When wholesale prices rise suddenly, retail prices tend to lag 

 behind. Much of the goods in the hands of retailers is sold at or 

 near the old price. When prices fall rapidly retail prices again tend 

 to follow slowly. Prices in small towns are likely to change more 

 slowly than in cities where the stock is turned over more rapidly. 



Farmers sell on a quickly moving market and buy on a slow 

 market, hence, when a sudden and violent drop in prices occurs, they 

 sell at low prices long before any great reduction occurs in the price 

 of things that they buy. 



Wholesale prices do not show the condition on farms. When 

 prices suddenly fall, farm prices drop much more than wholesale 

 prices and very much more than retail prices. For example, take 

 the case when a product sells for $3 at wholesale and $2 on the farms. 

 If the wholesale price drops 33 per cent, the farm price will drop 

 nearly 50 per cent, or nearly to $1. The reason for this is that freight 

 and many other costs of marketing are based on the physical quantity 

 handled, not on price. 



Many apples, potatoes, and cabbages were thrown away during 

 the past year because they would not pay the shipping costs. City 

 wholesale prices rarely go below the costs of shipment and handling, 

 and so do not show real conditions. 



Farm prices of products in the surplus States that are farthest from 

 market are much lower than the prices for the United States as a 

 whole, so that even the farm prices as given in this bulletin do not 

 show the true status in States at the centers of production. For ex- 

 ample, the United States farm price of corn in June was 92 per cent 

 59143°— 21— Bull. 999 3 



