FACTORS AFFECTING THE PRICE OF HOGS 53 
SUMMARY 
The returns to the producers of hogs depend to a considerable 
extent upon how well they adjust the volume of their production to 
the demand for the product. They can make the best adjustment 
only if they can reach a sound conclusion as to the future develop- 
ments in the hog market. Clear understanding of the forces which 
affect the market price is a prerequisite to reaching such conclusions. 
The dominant influences in the hog market, as shown by this 
study, are (1) the supply of hogs on the market and expected to 
arrive on the market within the next few months, (2) the quantity 
of hog products in storage, (3) the general price level, (4) general 
business conditions, and (5) the prices of alternative products. The 
general levels of demand, both here and abroad, are both important, 
but ordinarily change only slowly. 
The " hog-price cycle" was found to be due to the tendency of 
hog producers to overshoot the mark in increasing production when 
the relation of hog prices to corn prices was favorable and to reduce 
too much when it was unfavorable. This excessive reaction resulted 
from the accumulation of production changes during the interval 
before reduced or increased breeding began to offset market receipts 
and prices. 
Coupling the corn-hog ratio, indicating what changes were likely 
to occur in breeding, with other factors indicating changes in the 
weight of hogs and the demands of the consumers, very good fore- 
casts of hog prices could have been made for the pre-war period. 
Since the war, however, conditions have been so unstable that the 
purely mathematical formula has not given such satisfactory results. 
At the same time the pig survey has provided the hog market 
with much better information as to the prospective supplies than 
were available before the World War, while the agricultural outlook 
reports of the Department of Agriculture and similar information 
from other sources may be tending to change farmers' reactions. 
Further studies would be necessary to determine how far the pre-war 
relations, presented in this bulletin, are applicable to the changed 
conditions. 
