HISTORY OF WHEAT PRODUCTION IN NEW ZEALAND 1]9 
high prices of 1877-8, 1880, 1887, 1903, to pick out years 
at random. Similarly, we find years of relatively low 
prices followed by decreases in the total supply. Thus 
prices were comparatively low in 1885, 1888, 1893, and 
1900, and in the following years there is a diminution 
in production. On the other hand, similar connections 
may be traced between supply and price, years of high 
total supplies being followed by years of low price, and 
vice versa. Typical examples of this are seen in the 
years 1892, 1899, when production exceeded 10,000,000 
bushels. 
The connection is more evident from a graph of total 
supply and average annual price. Index numbers of 
supply and price with the base period of 1890-99 have 
been taken, and from these graphs of the two periods 
have been drawn. Looking at this graph we notice the 
connection hinted at above even more marked, especially 
of recent years. With few exceptions a ‘‘ecrest’’ in the 
graph of prices corresponds with a ‘‘trough’’ in the 
graph of supply, and vice versa. It is remarkable how 
often a ‘‘trough’’ in supply just precedes a ‘‘crest’’ 
in price, while on the other hand price minima precede 
supply minima. 
Such generalisations of course are open to exceptions, 
for supply is only one factor in the determination of 
price from year to year. In the following chapter price 
movements will be treated more fully, but this rough 
correspondence of supply and price movements may be 
noted here as an important influence determining the 
fluctuations in supply from year to year. Turning to 
graphs of supply and price where quinquennial averages 
are taken over the same period as previously, we notice 
that the curves frequently intersect and for the most 
part move in opposite directions. This suggests that 
there is correlation between supply and price. 
