26 
BULLETIN 1440, U. S. DEPARTMENT* OF AGRICULTURE 
It has been shown that there has been a rather definite sequence 
of events in the hog market, responsible for the swing, except under 
such abnormal conditions as during the war period and the following 
period of readjustment. Since events have usually followed in this 
rather regular manner, it is possible to pick out certain factors whose 
current values will serve to indicate what conditions in the hog- 
market are most likely to be some months later on. 
The general prosperity of consumers in this country, as measured 
by industrial activity, was another factor affecting the demand for 
hogs. It is possible to forecast changes in industrial activity to 
some extent from the changes in the prices of stocks in the stock 
market, stocks generally starting to increase in value a few months 
before the lowest point of a period of "depression" is passed, and 
generally beginning to decline in value a few months before the high 
point in a period of "expansion" is reached. Even as far as six 
DOLLARS 
PER CWT. 
10 
9 
8 
7 
6 
5 
4 
MONTHLY HOG PRICES WITH CYCLES AND TREND 
h 
Act 
j al Hog Prices—^, 
Movii 
j A veroqe ~-~^/ i 
\ 
A.. 
!\A 
3 
V^f 
/~Q~£$ 
-YJ7 
rend 
vv A <• 
i 
\ 
J V \ 
5^ 
Ptf 
\1 
Y 
1 
V 
1/ V 
V 
1 
nl cxj-uu, 
1 
i, ih, lull: 
■uluUdU 
.....IMM 
.ululMLu. 
ii|m 
aluhiUl 
i.iniitin 
„„,.,„„ 
" J. A. J. O. J. A. J. O. J. A. J. O. J. A. J. O. J. A. J. 4 J. A. J. O.J. A. J. O. J. A. J. O. J. A. J. O. J. A. J. O. J. A. J. O.J. A. J. O. J. 
1904 1905 1906 1907 1903 1909 1910 1911 1912 1913 1914 1915 
Fig. 21.— Actual hog prices, prices with seasonal variation eliminated, and straight-line trend, 
for period 1904 to 1915. This shows how hog prices swing first above and then below the long- 
time trend 
months ahead, for the pre-war years the prices of stocks were found 
to have a relation to the price of hogs, indicating that coming 
changes in demand might be indicated that far ahead. 
Exhaustive trials of the different available series show that four 
series of data are best suited to use in constructing an index of these 
future developments. These series are (1) the corn-hog ratio, 
reflecting conditions most likely to cause farmers to change their 
breeding plans; (2) the price of corn, indicating the weight to which 
hogs are likely to be fattened; (3) the weight of hogs, indicating the 
current balance between corn prices, hog prices, and breeding animals; 
and (4) the prices of the stocks of industrial corporations, indicating 
what the speculative community thinks of the outlook for general 
business conditions. 
Combining these four factors into a single index according to the 
methods described in detail later (see pages 46 to 50), a forecast of 
hog prices for the period 1903 to 1914 was computed, as shown in 
Figure 22. 
