S. DEPARTMENT OF AGRICULTURE 
part of the crop is sold for manufacturing purposes, as starch and 
potato flour in the case of potatoes, and cider and evaporated stock 
in the case of apples. Should the farm price include the price re- 
ceived for that part of the crop sold for seed? This can be answered 
only when we know how the price is to be used. Farm prices un- 
doubtedly include many seed prices. 
It is doubtful whether the average farm price as reported really 
does make full allowance for the sales of low-grade and poor-qual- 
ity products. It was with this in mind that early in the work of 
collecting price data it became the practice in rounding a price 
always to round downward. The State averages of hog prices per 
100 pounds are rounded downward to the first even 10-cent price 
per 100 pounds. 
FARM-PRICE QUOTATIONS 
Quotations of farm prices tend to group themselves about certain 
figures divisible by 5 or 10. One hundred and two of the 181 reports 
as to the price of corn per bushel in Iowa on May 15, 1926, were on 
the 5-cent interval; the price given ranged from 45 cents in 4 re- 
ports to 80 cents in 7. None of the reports gave the price as being 
between 45 and 50 cents or between 65 and 70 cents. There were only 
4 reports that gave the price as between 60 and 65 cents. In 155 
reports the prices given ranged from 50 cents through 60 cents; in 
88 reports, or 57 per cent of the total number, the prices were 50, 
55, or 60 cents. 
Hay prices per ton are usually rounded in the reports to the near- 
est half dollar or even dollar. Prices of dairy cows and horses per 
head are nearly always given as amounts exactly divisible by 10 or 5. 
It is logical that farm prices should be quoted in this way by the 
reporter, as the prevailing price for a given grade or quality of a 
product is more likely to be a figure divisible by 5 or 10 than some 
other figure. Where farm products are not sold by specific grades, 
local quotations are made to include about the average quality that 
will be offered and are based upon the primary-market prices being 
quoted for the grade which the mixed lots will make. Large quan- 
tities of farm products are purchased without grade specifications. 
Unless local competition in buying is unusually keen the local buyer 
is inclined to set the price at a rounded figure. If farm products 
are being sold by specified grades and the reporter is asked to make a 
general average of all sales, he too is likely to round his estimate to 
a convenient figure. 
GEOGRAPHY OF FARM PRICES 
Farm prices tend to fall into zones in much the same way as cli- 
matic data. Since the general movement of wheat, for example, is 
toward the centers of population and regions where production is 
less than consumption, the lowest-price zones are usually located in 
the areas of heavy surplus production. The zones of successively 
higher prices tend to form more or less concentric circles about the 
zones of low prices. Freight charges and local demand are the most 
important elements contributing to the geographical variation of 
farm prices (i£, 13, IJj.). 2 
2 These three bulletins contain a detailed description of the geographic variations of 
farm prices of wheat, corn, and oats by counties. 
