RELIABILITY AND ADEQUACY OF FARM-PRICE DATA 61 
are probably influenced more by the value of small farm flocks than 
by the value per head of the large farm and range flocks. A dif- 
ference of only a few weeks after January 1 would make a consider- 
able difference in the average value of swine on farms because of the 
movement to market from farms at that time of the year. The Jan- 
uary 1 values of the department are obtained from crop reporters 
not later than about the fifth of the month. The Federal Census 
enumeration was not completed in all sections until some time after 
the middle of January. The January 1 values of livestock per head 
are a reasonably comparable measure of inventory value of livestock 
from year to year and between States. They are based on a rela- 
tively large sample and, although highly variable, there are sufficient 
numbers of reports to render the average value a reliable measure 
of the central tendency of the sample even in the smaller States. 
COMPUTATION OF FARM INCOME (8, 9) 
No series of farm prices that is suitable for calculating the total 
value of crops is quite correct for calculating farm incomes, because 
the two calculations require different systems of weighting. For 
calculating values, prices should be weighted by production; for 
calculating income, prices should be weighted by the quantities sold. 
Since prices, as a rule, are lowest in those sections which produce 
for sale, weighting by sales usually results in a lower average price 
than weighting the same local estimates by production. Further- 
more, since income is usually calculated by multiplying quantities 
sold by the price per unit received for those sold, the question of 
shrinkage is not involved, and carry-over can be taken care of in 
inventory analysis so that the proper price figures would be weighted 
monthly by localities in proportion to current monthly sales. Un- 
fortunately adequate information for such weighting is available 
only for a few States and for only a few commodities. 
The problem of agricultural incomes by States is now receiving 
considerable attention in several States. The farm-price data of the 
department are being used for these studies. For all but the small- 
est States and for all important farm products the farm prices by 
States will be reasonably satisfactory. Monthly inconsistencies tend 
to compensate when the weighted average for 12 months is deter- 
mined for use in a State income study. For a farm product such as 
tobacco, which varies greatly as to grade, type, and price even within 
a single State, the annual average price is about the only satisfac- 
tory farm price. Monthly farm prices of tobacco are practically im- 
possible to obtain with the present facilities for collecting f arm-j>rice 
data. 
INDEX-NUMBER MAKING FOR FARM PRICES (5, 7) 
Farm prices are now being used as the basis of farm-price index 
numbers both for the United States and for States singly. For 
this use comparability over the entire period since 1910 is important. 
Every effort has been made to keep the prices comparable and with 
the prices of the major farm crops and kinds of livestock and most 
livestock products, a high degree of comparability has been main- 
tained. Changes in methods of production and marketing and in the 
quality produced have made the farm butter price less satisfactory 
for the purpose of a price-index number than the price of almost 
