GEOGRAPHICAL PHASES OF FARM PRICES: CORN. 43 



most southern States, its high price and comparative scarcity limit 

 its use for live-stock production. Throughout the country large 

 local consuming centers of an industrial character have sprung up; 

 in the New England States many million bushels are consumed in 

 glucose and starch manufacture; a strong local demand for corn 

 existed in Chicago, Indianapolis, St. Louis, and Peoria for use in 

 manufacture of corn products and in distilling and brewing. 



While a strongly defined greographic trend prevails in the price 

 levels, much local unevenness is observable, as well as irregularity 

 in the degree of increase. This is particularly manifest in regions 

 which are mountainous, with inadequate transportation facilities 

 or otherwise not well situated as to markets. It is also seen in areas 

 wherein corn traffic is in smaller volume. In the midst of sections 

 of insufficient production localities raising a surplus appear occa- 

 sionally; the level of prices there is lower than in surrounding 

 territory. 



The outstanding feature of the distributive movement of corn is 

 the local character of its markets, for only a fifth of the crop enters 

 the national trade channels. Farm consumption absorbs over four- 

 fifths of the crop; hence local conditions are partly responsible for 

 much unevenness in the trend of the price levels. In some localities 

 costs of hauling from farms to shipping points appear to be greater 

 in time of peace than rail and ocean freight charges to some Euro- 

 pean markets. Diverse elements enter into local prices, such as the 

 condition of roads, accessibility of markets, availability of cheaper 

 water transportation, and the character of the local demand. 



Although urban consumption disposes of only about a sixth of the 

 crop, a considerably larger fraction is concentrated in urban markets 

 for local use and reshipment. The largest markets are in the corn 

 belt ; they reship two-thirds of their receipts. Unlike wheat, markets 

 for corn in other sections of the country are of minor importance. 



Freight rates constitute the most important single element in 

 price disparities. While distance is an important factor, rates are 

 not directly proportional thereto. Competition between trade routes 

 and markets, and volume of traffic, tend to lower rates in the sections 

 affected. 



In aligning sectional differences in farm prices with costs of pro- 

 duction it is necessary to take into account yields to the acre. In 

 the main, low farm prices are offset by high costs of production, 

 and the converse also is true. High prices and high yields in bushels 

 to the acre result in low money returns in the industrial East, be- 

 cause of high costs of production ; high prices and low costs of pro- 

 duction, but also low yields to the acre, result in relatively low 

 money returns in the South. 



