By means of corn-hog ratios, it is possible to determine with great accuracy month by month the production cost of one hundred pounds of hog flesh. The actual price, however, has been quite different from the cost-of-production price, except as an average of long periods of time. This is indicated by the profit and loss chart on page 32, the black areas above and below the zero line indicating the departure of the actual price from the ratio or cost of production price. The actual price heretofore has been determined chiefly by the action of supply and demand and not by cost of production. The close agreement between actual price and the supply-and-demand price as based on a formula derived from bank clearings and hog receipts is shown on page 96. In the chart on page 107 are presented the cost-of-production price based on ratios and the supply-and-demand price as based on bank clearings and hog receipts. The ratio or cost-of-production price is much steadier than the supply-and-demand price. If the farmers could arrange with the packers for a price more nearly representing the cost-of-production or ratio price, it is obvious that the supply of hogs might be considerably steadied. Once farmers realize that neither excessive profits nor excessive losses are to be expected in the hog business, they will steady down to producing about the same number of hogs each year, and they will send them to market in a uniform stream, instead of in irregular spurts. Of course, there are always uncertainties in the way of weather, disease, etc. Hot, dry weather in July and August may curtail the corn crop and shoot up the price of corn and the cost of producing hogs. Such hot, dry weather immediately increases the cost of producing hogs. The packers, heretofore, have been either unable or unwilling to pay a price for hogs sufficient to cover the increased cost of production caused by the hot, dry weather, and as a result they have been compelled to pay more than cost of production a year or so later. Why shouldn’t the packers and farmers constantly educate the public to pay the cost-of-production price? Tell the public that the drouth and high corn prices have increased the cost of producing hogs, and the price must be increased to prevent a shortage next year. Why shouldn’t the farmers try to find a way to regulate the supply with an iron hand, in an endeavor to maintain approximately the cost-of-production price at all times? This means willingness to lower the price of hogs in years when the corn crop is large, as well as ability to raise the price in years of a short corn crop. [Illustration: Dotted line represents the supply-and-demand price of hogs as derived from bank clearings and hog receipts. Solid line represents cost of producing hogs, based on corn-hog ratios. ]