22 
BULLETIN 1440, U. S. DEPABTMENT OF AGRICULTURE 
Figure 18 shows just how much hog prices did change in the last 
20 years, as compared with corn prices. In this chart the light areas 
show periods when hog prices were above the price of 11.4 bushels of 
corn; the dark areas show periods when hog prices were lower than the 
price of that much corn. During this period there was apparently a 
rather regular change in the relation, first hog prices were higher for a 
year or so, then they were lower for about as long. 12 
REACTION OF FARMERS TO THE CHANGES IN THE CORN-HOG PRICE RELATION 
When hog prices are high relative to corn prices, farmers are en- 
couraged to increase their production of hogs. Although this in- 
crease in production takes place much faster than it does for most 
other livestock, still some time is required. If hog prices have been 
good in the summer and fall, and corn prices relatively low, many 
farmers may decide to produce more hogs. They breed more sows 
(or gilts) that fall than usual. Next spring there is a larger crop of 
DIFFERENCE BETWEEN SALES VALUE OF 11.4 BUSHELS OF 
CORN AND 100 POUNDS OF HOGS 
Prices of H4 Bushels corn. 
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I903'04 '05 '06 '07 '08 '09 '10 'II *I2 '13 '14 '15 '16 '17 '18 '19 "20 '21 '22 '23 '24- '25 '26 
Fig. 18.— The corn-hog differential. This shows how much more or less 100 pounds of heavy- 
hogs were worth than 11.4 bushels of corn each month from 1903 to 1925. (Both prices are at 
Chicago.) A fairly regular swing in the relation is evident 
pigs. Not until after those pigs have been fattened and shipped to 
market — most of them during the following fall and winter — do the 
actual market receipts become larger because of the more favorable 
prices during the summer and fall of the year before. For this reason 
it takes about a year to a year and a half for changes in relative prices 
to have much effect upon the number of hogs sent to market. 
Figure 17, page 20, shows averages of the corn-hog differ- 
ential (the difference between the value of 100 pounds of hogs and the 
value of 11.4 bushels of corn) and the receipts of hogs at 11 important 
markets. (Smoothed lines have been used for each series, so as to 
eliminate the usual variation from month to month.) Except during 
the war period, changes in the relation of hog prices to corn prices 
were followed by similar changes in the receipts of hogs about a year 
and a half later. In 1906 and early 1907 hogs were high, compared 
with corn; and in 1907 and 1908 receipts increased. In late 1907 
12 The fact that neither price was adjusted for price level exaggerates the differences for the war and post- 
war years. The ratio form of statement, obtained by dividing one price by the other, has the advantage 
of automatically eliminating these price-level differences. 
