118 WHEAT PRODUCTION IN NEW ZEALAND 
Zealand is a young country with rapidly changing 
conditions; and there should be considered other con- 
ditions besides gross production, as for instance, rapidly 
changing population or the foundation of new industries. 
It will be only after an equilibrium has been established 
and the country passes out of its initial stages of develop- 
ment that the causes of cyclical changes will be open 
for study on a more certain foundation. The recent 
investigation by the Census and Statistics Office into the 
Cost of Living in New Zealand throws further light 
on the subject of cyclical fluctuations in agricultural 
- produce in New Zealand. The graph of the combined 
index number of five home products (bread, flour, oat- 
meal, potatoes, and onions), shows a more or less regular 
period of fluctuation of about four years. This is very 
clearly shown in a graph which portrays deviations 
above and below the average of the series. The result 
is a regular succession of troughs and crests until recent 
years when conditions have been somewhat abnormal, 
‘‘Roughly, these oscillations above and below the average 
represent variations in production from period to period, 
and the regularity with which periods of high and low - 
prices alternate is so striking as to suggest some 
underlying cause or law, probably connected with 
production.’’* 
7. Relation Between Supply and Price. 
If fluctuations in the annual supply of wheat produced 
in New Zealand are compared with the corresponding 
movements in New Zealand wheat prices during the 
last four decades, a tendency to inverse correlation 
is noticeable. Thus, a year of high prices is almost 
invariably followed by increased production at the 
following harvest. Such was the case after the relatively 
*See ‘‘Report ou the Cost of Living in New Zealand from 
1891-1914.’? Pages 24-5. 
