FACTORS AFFECTING THE PRICE OF HOGS 9 
lent that except for these very minor differences the same eco- 
ex nic conditions which determine the price at one market must 
rr termine the price at other markets. It may be said that there is 
Sit a single central "market" for hogs in the United States. The 
several central points at which prices are established are so closely 
interrelated that the general conditions which govern the price are 
the same for all the markets. 
Not only do hog prices in our central markets move closely together, 
but they move closely with prices in foreign markets. When prices 
of hog products are high in Chicago they are high in Liverpool; 
conversely, when prices are low in Chicago they are low in Liverpool. 
Figures 7 and 8 show the extent to which Chicago and Liverpool 
prices for hog products tend to move together. These Liverpool 
prices serve as an indication of the price which foreign consumers 
are willing to pay for our meat. 
The important pork-consuming section of Europe, which includes 
the United Kingdom, northern France, Belgium, the Netherlands, 
Denmark, Germany, and the southern parts of Norway and Sweden, 
comprises one of the principal hog-raising regions of the world. Yet 
since production in this region is inadequate for the requirements of 
the population, large quantities of our pork products move regularly 
to Europe, and the strength of the export demand is an important 
factor in our market situation at any time. 
The price of hogs at Chicago, the largest central hog market in the 
world, may therefore be taken as an index of conditions throughout 
the world-wide market within which the general economic forces 
operate to determine prices in each market place. 
PRICES USED IN THE STATISTICAL ANALYSIS 
Even after the point at which the price is to be used has been decided 
upon, two other questions must be decided: (1) What specific price 
is to be used? and (2) what period of time is to be covered? Since 
hogs are frequently sold in lots of about the same weight but without 
regard to finish, the most significant differentiation in the market 
reports is by the weight of the hogs. The prices for heavy hogs 
were selected as the basis of the statistical study; however, the subse- 
quent investigation of the relation of the prices for hogs of various 
weights, discussed later, indicated that prices for medium-weight 
hogs would have been more representative of the general changes in 
hog prices. 
Selection of the time period to be used as the basis of quotation 
is possibly more significant than price. In the central market, 
prices may change almost every minute, and from opening to closing 
the change may be very great on some days. Just why prices are so 
variable from hour to hour and from day to day would require an 
extensive investigation by itself. For the first approach, however, 
it would seem best to disregard the more rapid variations and use 
only the general price average over a period of time long enough to 
indicate the general level. 
A practical consideration in this connection is that much of the 
data on the subject — receipts at markets, slaughter under Federal 
inspection, indexes of prices, employment, and production, and other 
2470°— 26 1 2 
