FACTORS AFFECTING THE PEICE OF HOGS 19 
PRICE OF SUBSTITUTE PRODUCTS 
When the price of one food product becomes cheaper most people 
tend to substitute it for other foods to some extent. A number of 
other foods compete with hog products for places in the diet. Beef 
competes directly with pork, oleomargarine and vegetable oils com- 
pete with lard, and even butter may compete when lard prices become 
very high. A change in the price of any one of these products will 
have some effect upon the quantity of pork products bought, and 
hence will affect the demand for hogs. 
Hog prices were rather sensitive to the price of fat steers during the 
period studied, especially at times when steers were low. When 
fat steer prices went higher than $7.50 per hundredweight (in terms of 
1913 dollars), further changes had relatively little effect upon hog 
prices; but when steer prices dropped much below that point, there 
was a marked effect, hog prices decreasing about 10 cents on the 
average for each 30 cents decrease in steer prices. Since beef prices 
were relatively stable for some years prior to the war, however, 
changes in steer prices were responsible for only a small part of the 
changes in hog prices during. those years. 9 
INTERACTION OF SUPPLY AND DEMAND 
This discussion has touched on a few of the complex set of economic 
forces which are ordinarily summed up in the phrase " supply and 
demand." No consideration has been given as yet as to why the 
supply changes as it does. Discussion of that point will show the 
extent to which farmers' actions and the cost of producing hogs affect 
the price at which the hogs will sell. (See pp. 20 to 23.) 
The discussion has indicated some of the more important factors 
which sway the minds of buyers and sellers, and so influence the price. 
In many cases the men actually dealing in the market may not realize 
just which are the forces affecting the situation. An increasing 
foreign demand, for example, may show on the market merely through 
somewhat larger purchases by a buyer for a packing concern which 
has received new orders for products packed for export. Unfavor- 
able conditions for farrowing, and consequently fewer pigs to be 
raised, indicating reduced marketings some months later on, may 
show merely through a stronger tone in the futures provision market 
with, in turn, possibly some effect upon the actual cash prices. The 
factors which have been described are the basic underlying causes; 
but they actually reach the market and influence the price only 
through the reactions of a large number of different men and in a 
variety of different market transactions. 
To some slight extent, or over short periods of time, a large group 
of dealers, either on the buying or selling side of the market, may by 
concerted action alter the prevailing price for hogs; but whether 
they can materially affect the trend of prices over any considerable 
time is decidedly open to question. For the period of January, 1907, 
to July, 1914, all but 12 per cent of the changes in the monthly price 
of hogs can be accounted for on the basis of changes in the different 
9 There are ether products entering into competition with hog products, which were not statistically 
examined in this study. Lard, in particular, enters into competition with other fats and oils, such as 
cottonseed oil, nut oils, and possibly butter at certain times and places. 
