PRICES PAID TO FARMERS 



The average prices paid to farmers for 31 farm products in the United States 

 are shown in Table XVII, pages 37 to 45. 



To determine accurately the conditions in a particular State, prices for that 

 State must be used. Prices for the United States include many States that 

 are importers of the product, rather than exporters of it. For example, New 

 York farms consume much more corn than they produce. For this reason, 

 the New York farm price is a consumer's price. It is determined by the price 

 in surplus States plus the cost, profits, and trouble of getting it shipped. United 

 States farm prices include a mixture of some prices that are characteristic of 

 city wholesale prices and some that are farmers' selHng prices. The fact that 

 wholesale prices do not show farm conditions is discussed on pages 17 to 18. 

 This principle holds with most farm products, but does not apply to wool or 

 cotton, because neither of these is consumed on farms without going through 

 the process of manufacture. Wherever produced these are for sale. 



Any change in freight rates also makes it impossible to determine the status 

 of a particular State from United States figures. During the period when prices 

 were rapidly rising, but while freight rates were held down, freight constantly 

 became a less important factor. Farm prices at distant points rose much more 

 rapidly that did prices near the centers of consumption. Also great quantities 

 of bulky products, like hay, were shipped long distances from regions that 

 naturally do not ship any. This stimulated types of fanning not permanently 

 adapted to such regions and handicapped farmers in near-by States who had 

 developed types of farming to supply city markets near them. Freight rates 

 were raised after prices had begun to fall very rapidly. This made the farm 

 prices in distant States fall much more rapidly than farm prices in near-by 

 States. The stimulated shipment due to low freight rates combined with high 

 prices was all stopped and much of the normal shipment was likewise checked. 

 Farm prices in distant States then fell excessively. For example, horses in 

 Montana are 43 per cent of the prewar price, while on New York farms to which 

 horses are shipped, the price is 82 per cent of the prewar price. (See pp. 17 

 to 18.) 



The data in Table XVII can be brought up-to-date by adding figures as 

 published by the Monthly Crop Pteporter. 



For convenience in calculating index numbers, the prices for the five years 

 August, 1909, to July, 1914, are given separately, followed by five-year average, 

 for each month. Yearly averages are given at the end of the table. The yearly 

 averages are higher than the average price received by farmers, because in the 

 months when sales are largest, prices are lowest. 



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