. RELIABILITY AND ADEQUACY OF FARM-PRICE DATA 49 
Since the farm price of hogs is reported as of the 15th of the 
month, the monthly average price of hogs on the Chicago market 
would not be entirely satisfactory, inasmuch as the market prices 
during the last half of the month would not affect the farm price on 
the 15th. The weekly average Chicago prices for the weeks end- 
ing the fifteenth of each month would probably be the best basis for 
comparison, but the weekly average prices of the Bureau of Agricul- 
tural Economics since 1920 for " packer and shipper droves " and 
those published by the Chicago Drovers' Journal are for the calendar 
week. 
The weekly average prices of hogs for the weeks ending' about 
the 15th of each month were obtained by roughly interpolating the 
published weekly prices mentioned above. The period from Janu- 
a^, 1910, to May, 1925, was divided into three periods: The first 
five years (Januarjr, 1910-December, 1914) was a period when the 
price level was practically unchanged; during the second five years 
(January, 1915-December, 1919) changes in price level would in- 
crease the correlation ; and during the third period (January, 1920- 
May, 1925) the correlation would also be iniluenced by changes in 
price level. The plus correlations between these Chicago average 
market prices and the Iowa farm prices were 0.992 for the period 
1910-1914, 0.998 for the period 1915-1919, and 0.997 for the third 
five-year period. The difference or spread between the market price 
and the farm price in the first period, 1910-1914, was from 43 to 90 
cents, averaging 65 cents, with a standard deviation of 13 cents. 
In other words, when hog prices in Chicago averaged $6 per hun- 
dredweight, the spread between the Chicago market price and the 
Iowa farm price was between 51 and 77 cents in two-thirds of the 
cases. 
During the second period, 1915-1919, when Chicago hog prices 
averaged about $13.60, ranging from $6.40 to nearly $22, the spread 
between market prices and farm prices averaged 90 cents, with a 
standard deviation of 18 cents. During the past five and one-half 
years, when hog prices in Chicago have averaged $9.75, the average 
spread has been 82 cents, with a standard deviation of 25 cents. 
A detailed study of the difference or spread between the farm price 
and the market price shows that the spread tends to be the greatest 
when the price has been advancing rapidly and the least when the 
price has been dropping rapidly. The local hog buyer is an im- 
portant factor in Iowa hog marketing, and his margin of profit 
apparently serves as a cushion to absorb the more violent price 
fluctuations. This series of farm prices seems to have about the 
same variability as the weekly average of prices of the same product 
at a central market, perhaps a little more at times. The standard 
deviation for the first period (1910-1914) of the farm-price series 
for Iowa hogs was 97 cents and the coefficient of variability 13 per 
cent, as compared with 99 cents and 12 per cent for the Chicago 
weekly market-price series. For the second period (1915-1919), the 
standard deviation of farm prices was $4.56 and the coefficient of 
variability 36 per cent, and the standard deviation of market prices 
$4.77 and the coefficient of variability 35 per cent. During the last 
period, the respective deviations were $2.55 and $2,67 and the coeffi- 
