FACTORS AFFECTING THE PRICE OF HOGS 21 
movement of hogs to market has been very much larger than it has 
at other periods. 
Previous discussion has shown that the almost constant changes in 
the supply of hogs, not only from month to month but from year to 
year, have been among the most important causes of changes in hog 
prices. For most livestock and livestock products the annual pro- 
duction is fairly steady. The production of milk and of butter 
usually changes but slightly from year to year; the number of beef 
animals fed out does not show violent changes from year to year; and 
the production of wool in this country changes only slowly. Why is 
it that hog production is so erratic? One reason is that hogs can be 
produced so rapidly that the number raised can be changed in a rela- 
tively short time. When hogs are profitable, farmers can increase in 
short time the number of pigs born and hogs fattened as compared 
with the time it takes to grow more dairy cows or beef cattle; and 
similarly production of hogs can be rapidly cut down when prices 
become unfavorable. 
BALANCE BETWEEN CORN PRICES AND HOG PRICES 
A second reason for the changes in hog production is that hogs are 
more dependent upon a single feed-crop than any other class of ani- 
mals. In this country, corn is the great staple upon which hogs are 
produced. Although some pasturage, some tankage, in some areas 
skim milk and some mill feeds are fed with it, corn is still the great 
measuring stick by which the farmer figures what it costs to feed his 
hogs. 
Corn prices change from year to year, as the size of the crop varies 
with the weather and other causes, and as the demand for the crop 
varies. And this variation in corn prices has made hog production 
sometimes seem, temporarily, very profitable to farmers, and some- 
times very unprofitable. 
During the period 1896 to 1914, 11.4 bushels of corn were worth as 
much on the Chicago market, on the average, as were 100 pounds of 
heavy hogs. This does not mean that 11.4 bushels of corn were used 
in the production of 100 pounds of hogs, but that all the costs enter- 
ing into hog production were such as to be covered, on the average, 
by a price equal to about that much corn. 11 
The difference between the price of 11.4 bushels of corn at Chicago 
and the price of 100 pounds of heavy hogs may therefore be used as a 
measure to show when the relation between corn prices and hog prices 
was unusually favorable to hogs, and when it was not. When that 
much corn was worth less than the 100 pounds of hogs, hog prices 
were above average as compared with corn prices; whereas when that 
much corn was worth more than the 100 pounds of hogs, hog prices 
were below average, compared with corn prices. 
11 Over a period of years price tends to equal necessary cost, not because the markets pay any direct 
attention to costs, but because the relation of price to cost governs supply. When the price drops below 
the equilibrium point, when farmers figure that the returns just cover the costs, they reduce their breeding 
operations. Later on, the reduced supplies, coming on the market, force the price higher. When the price 
rises above the equilibrium point, farmers are encouraged by the extra profits to increase their output; 
later the increased supplies reach the market and force the price down. The hog price which just equals 
necessary cost is apparently equal to that of 11.42 bushels of corn, for that represents the point at which 
farmers would apparently neither increase nor decrease their production. Hog production has been 
increasing during this period, however, so that the average ratio of 1 to 11.4 was not merely sufficient to 
maintain constant production, but was sufficient to maintain the average increase in production for this 
period. Since this relation has been sufficient to maintain an upward trend in production, somewhat less 
than 11.4 bushels of corn would represent the necessary cost for merely maintaining a constant production. 
