Three forces are prominent in making agricultural prices—cost of production, supply and demand, and strategic considerations. Farmers and laborers believe that cost of production should be the chief consideration. Business men preach “supply and demand” as the great price-making force, and in addition use strategic propaganda when it is to their advantage to do so. Cost of production in the long run is on the average practically identical with both the supply-and-demand price and the actual price. It is in the very nature of things that those producers who can not on the average get cost of production will go out of business. In the case of the hog business, it takes about three years for the average man to get in and out. Ten years, which is fully three times the “in and out” cycle, is “long run” in the hog business. A ten-year average of actual hog prices should therefore be approximately equal to a ten-year average of the cost-of-production price of hogs. As a matter of fact, we find that the cost of production, as shown by the corn-hog ratio, is practically the same from one decade to the next. Decade after decade, the corn-hog ratio has remained constant at eleven to twelve bushels of Chicago corn per hundred pounds of Chicago hog ever since the Civil war. Farm management investigations indicate that for the average farmer this ratio represents approximately cost of production. As a matter of fact, this ratio is “cost of production” in the very truest sense of the term. This ratio represents the reward necessary to keep enough farmers producing hogs to satisfy the consuming demand, year in and year out. Stated thus baldly and simply, we see how the cost of producing a hundred pounds of hog weight must in the long run average the same as the “actual” price and also the “supply and demand” price. And yet hogs may sell for a year or so for the value of fifteen bushels of corn, as they did in 1866 and 1910, or they may sell for a year or so for the value of nine bushels of corn, as they did in 1908 and 1917. At any given time, the cost-of-production price is likely to be decidedly lower or higher than the actual price or the supply-and-demand price. It is only on the average that cost of production becomes identical with the actual price. Supply-and-demand price departs from the cost-of-production price at any given time because of such things as unusual weather, accidents, etc. Dry weather in July and August may cut the corn crop short, and as a result temporarily increase the number of hogs marketed. Under such conditions, the packer buyers make no attempt to pay for the hogs the increased price which the higher price of corn would warrant, but instead buy as cheaply as they can, quoting in defense, “supply and demand.”