PART I. Our Present Price-Registering System 7 The Three Price-Making Forces 11 Criticism of Our Price-Making System 15 Supply and Demand 20 Can “Price” Make “Supply and Demand”? 22 Cost of Production 26 Ratio Method of Determining Cost of Producing Hogs 30 Supply and Demand Versus Cost of Production 36 Cattle Prices and the Ratio Method 39 Packer Prices and the Ratio Method 41 Milk Price Determination 44 Cost of Producing Crops 49 Consumers’ Ratios 52 Technique of the Ratio Method 57 Limitations of the Ratio Method 60 Retail and Wholesale Prices 62 Pork Exports the Barometer of Corn Belt Prosperity 64 Corn Belt Land Values and the Cost of Producing Corn 72 Price Stability and Soil Fertility 74 Measuring Total Crop Production 75 PART II. Mathematical Study of Supply and Demand in the Hog Market 81 Predicting the Future of Hog Prices 98 Limitations of the Mathematical Method 103 Conclusions Based on Ratios and Mathematics of Supply and Demand 106 Appendix 113 OUR PRESENT PRICE-REGISTERING SYSTEM[1] Prices of corn belt food staples are registered more promptly and more delicately on the Chicago Board of Trade than anywhere else in the world. The farmer visitor in Chicago, who has a few minutes to spare, finds it very interesting to look down from the Chicago Board of Trade galleries on the corn pit. For several minutes, the pit may be the dullest thing imaginable, and suddenly news will “break.” Perhaps it is the month of August, and it has begun to rain in Nebraska. As a result, certain operators are anxious to dispose of the corn for which they had contracted. Perhaps it is 9:30 on another August morning, and the temperature, even this early in the day, is 85 degrees, and the prospects are for hot winds sweeping Kansas and southwestern Iowa. Men who have sold corn “short” a few days before, on the strength of local rains, are now thoroly scared, and rush into the pit to buy back before the price runs up more than three or four cents.