What would happen if cost of production were to be paid in the hog market day by day, year in and year out? By cost of production is meant the 11.5-bushel ratio, modified seasonally. Packers can think of many objections. For instance, they can conceive of periods of a year or two at a time when the 11.5-bushel ratio would necessitate paying the farmers more for their hogs than they could get for the meat. Equally, they can see how it might be that for periods of a year or two at a time, they would be able to get out of the consumers a price equivalent to considerably more than the 11.5-bushel ratio. Admittedly, these objections are sound under present conditions; supply-and-demand price is the only price adapted to the _laissez faire_ situation. If farmers as a class are to secure cost of production for their hogs month after month and year after year, they must organize into powerful associations to do business co-operatively. They must control the supply of hogs with an iron hand and an intelligent head. They must be willing to play fair with the consumers and not charge more for their hogs than the ratio of the past sixty years. In fact, it is conceivable that they might be able to sell their hogs at slightly less than the 11.5-bushel ratio of the past sixty years. If the organization was really powerful enough to enforce the cost-of-production ratio over any period of time, the market risk, which has been a very serious factor in the past, would disappear. This risk has been such a factor that it is quite possible that farmers would be willing to produce enough hogs to satisfy the market at an eleven-bushel ratio if the risk no longer existed. The author estimates that as an average of the past sixty years the consuming public has been paying at least 50 cents per hundredweight more than necessary for its hog products. This extra 50 cents has been in the nature of risk insurance. It is conceivable that both farmer producers and city consumers might organize to carry this risk between them, the city consumer co-operative organizations agreeing in advance to take a certain number of pounds of hog products, and the farmer producing organizations agreeing to furnish such a quantity of hog products on the basis of a corn-hog ratio representing cost of production. CATTLE PRICES AND THE RATIO METHOD A ratio between corn and cattle does not represent cost of production nearly as accurately as a ratio between corn and hogs. However, such a ratio, when worked out and applied over a long period of years, reveals the interesting historical fact that the swings in cattle prices above and below the ratio line are periods of about seven years each way.