A PROPOSED REVISION OF THE INDEX OF PRICES RECEIVED BY MICHIGAN FARMERS mask for the Dame-e of M. S. MICHIGAN STATE COLLEGE Gem-gs Bernard Murray W50 ‘hl fl}! W;W‘ " ‘_ A- 1‘ ' ’ :\' .’ ' ;- s: I "u .- ‘5 . ‘W‘WF’I Eel-91 i I 3-.“- '7 .w‘5m‘“f"fl”1‘w_t‘3i‘ 3w Nwfififlfl "WWW“ " ‘ ~ 13- 2.33; ai- -— I! I E! This is to certify that the thesis entitled I "A Proposed Revision of the Index of Prices Received by Michigan Farmers" - presented by I GEORGE B . MURRAY - :- has been accepted towards fulfillment R of the requirements for r' M. 8. degree in Agr_icu1mral Economics i I 72% D Major professor Q I A 1.. ./\*7" h -—--...= . .e \J... -‘tL—.- «I: 1—5 -‘4 Iw‘ w - '8'“: I ‘ A PROPOSED REVISION OF THE INDEX OF PRICES RECEIVED BY MICHIGAN FARMERS By GEORGE BERNARD MURRAY A THESIS submitted to the School of Graduate Studies of Michigan State College of Agriculture and Applied Science in partial fulfillment of the requirements for the degree of MASTER OF SCIENCE Department of Agricultural Economics 1950 AC KI‘JO’TI’LEDGMIL‘N'I‘S The author wishes to eacpress his gratitude to all who helped in the preparation of this manuscript. Valuable assistance was given by Professors O. Ulrey and K. T. Wright of the Agricultural Economics De- partment. Their guidance and reading of the entire manuscript and their suggestions were gratefully appreciated. Other members of the Agricultural Economics Department gave generously of their time on many of the problems encountered from time to time. Also, to C. J. Borum and other personnel of the Office of the State Agricultural Statistician, the author wishes to express his thanks for their aid in the collection of much of the essential data. The author, of course, assumes full responsibility for any er- rors that may be present in this manuscript. GEORGE BERNARD MURRAY {35‘331'3‘12 :3 CUfifim -..-‘5 _ ' ”BIB OI“ CO] ITLVVL‘ --‘.—.‘.‘H-—H- --..-- ER ...—- 4---.— ~— #4 T .L II IITTEZODYYCTIOE' . O O O O O O O O O O O O O O m‘ 311' *‘ WT‘SWEP‘TW“ :LJILI OE LI.J§AV 4L 0 e e e e e e e o e 0 Early C“ntrihutions e e e o e e e e e e The Period from 1915 to 1919: The Probl m of the "BOSE Formula" 0 o e e e e e e e e e e .Dovelopment of the Index-Eumher Series Published F Bureau of h~ricultura1 Boonorios . . . . A Survey of State Index-”umber Series . I"? EIU"V- "EYE“. SEIITS OF PRICES REG“IVED BY IICHI"£u I IXuJTIS 1910-119. 0 e e e e u o e e e e 0 Description 0 e e e e e e e e e e e e 0 Heads and Re o“rces for a Revision . . . Prososso REVIS IO? 19%9 . . . . . . . . . . Procedure. . . . . . . . . . . . . . . . The Revised Index-Number Series . . . . Splicing the Revised Index number Series Price Base 0 e e e e e e e e e e e e e e -v- I The Revised In‘ex-Humber Series Shifted Price Base 0 o e e e e e e e e e e o e e SVZIKLY AID CO""IUSIO"S . . . . . . . . . Summary . . . . . . . . . . . . . . . . Conclusions . . . . . . . . . . . . . . BIBITOCRAPHY . . . . . . . . . . . . . . APPEIDIX A: Calculations . . . . . . . . ... . IQBHPEQ, 1935-39 = 100 . . . . . . It Index Hunters of Prices of fiictisan IQBL-hg, 1910-1“ I 100 e e e e e e : Index Numbers of Prices of Llfi‘l”an T O O O O O O O bv the O O O O O O O O O O O O O O C O O O O O O O O O O O O O to the 1910-1h to the l910-1h Peru Products D: Calculations: Index of thsical Volume of Farm Products Earhoted in Zich i an . . . PA‘FE ---- -—. .10 .12 15 17 20 2O 51 37 7O 79 87 LIST 93 TABLES TABLE NUMBER PAGE 1 Groups of Products in Revised and Unrevised Index-Number Series of Prices Received'by'Michigan Farmers . . . . . . . 22 2 Annual Average Value of Sales of Selected Products in the Revised Indexes as Compared with the Total Michigan Cash FamIncomeeeeeeeeeeeeoooeeoeeeeeee2h 3 Comparison of Annual Average Value of Sales of Selected Products for the Revised Indexes as Compared with the Total Michigan Cash Farm Income Received by Groups . . . . . . . 25 h A Comparison of the Adjusted Weights of the Revised and Un- revised Index-Number Series of Prices Received by'Michigan Farmers..........................27 5 Base Values and Group Weights for Monthly Index of Prices Received by Michigan Farmers, Using l93h-h3 Weights . . . . 29 6 Base Values and Group Weights for Annual Index of Prices Received by Michigan Farmers, Using 193h-h3 Weights . . . . 29 7 Base Values and Group Weights for Monthly Index of Prices of Michigan Farm Products, Using l938—h7 Weights . . . . . 30 8 Base Values and Group Weights for Annual Index of Prices of Michigan Farm Products, Using l938—h7 weights . . . . . 30 ii LIST OF TABLES - Cont'd TABLE NUMBER PAGE 9 Annual Index Numbers of Prices Received by Michigan _ Famers for S9 PrOdUCtS, 1935-39 - 100 e e e e e e e e e e 31 10 Annual Index Numbers of Prices Received for Michigan Cash FieldCrops,l935-39-100 eeeeeeeeeeoeeeee 32 11 Annual Index Numbers of Prices Received for Michigan Feed Crops,l935-39'100...................32 12 Annual Index NUmbers of Prices Received for Michigan Dairy Pr0duCtS,l935-39.100000eeeeeeeeeeeeeee33 13 Annual Index Numbers of Prices Received for Michigan.Meat MSMdW001,193S-39-10000000eeeeeeeee 33 1h Annual Index Number Series of Prices Received for Michigan POlfltr'y PrOdUCtS, 1935-39 =100 e e e e e e e e e e e e e e 321 15 Annual Index Numbers of Prices Received for Michigan Fruit Crops,l935-39-100.......-............31; 16 Annual Index Numbers of Prices Received for Michigan Truck Crops,l935-39-100...................35 17 Annual Index Numbers of Prices Received for Michigan Miscel- laneouSCropS,l935-39'100.ooo............ 35 18 Comparison of Annual Index Number Series of Prices Received by 15161113811 Farmers, 1935-39 . 100 e e e e o e e e e e e e 39 iii TABLE LIST 92 TABLES - Cont'd NUMBER 19 20 21 22 23 2h 25 26 27 28 Comparison of Annual Index Number Series of Prices Received for MiChigan CaSh Field CI'OPS, 1935-39 - 100 e e e e e e 0 Comparison of Annual Index Number Series of Prices Received fOr IinChigan Feed Crops, 1935-39 = 100 e e e e e e e e e 0 Comparison of Annual Index Number Series of Prices Received for Michigan Dairy Products, 1935-39 - 100 . . . . . . . . Comparison of Annual Index Number Series of Prices Received for Michigan Neat Animals and Rbol, 1935-39 I 100 . . . . . Comparison of Annual Index Number Series of Prices Received for Michigan Poultry Products, 1935-39 = 100 . . . . . . . Arithmetic Mean of the Ratio of Revised to Unrevised Index- Number Series for the PeriOd 1935-39 0 e e e e e e e e e 0 Annual Index of Prices Received.by'Nichigan Farmers, 1 910-111 = 100 O O O O O O O O O O O O O O O O O O O O O O 0 Annual Index of Prices Received for Michigan Cash Field crops’19lo-1JJ-100eeeeoeeeeeeooeeeeee Annual Index of Prices Received for Michigan.Feed Crops, 1910-1h-1oo.........'.............. PAGE 39 ho hO 142 145 115 50 Annual Index of Prices Received for Michigan Dairy Products, 1910-111 . 100 O O O O O O O O O O 0 O O O O O O O O O O 0 0 iv 50 TABLE LIST 9E TABLES - Cont'd NUMBER 29 30 31 32 33 3h Annual Index of Prices Received for Michigan Meat Animals andWOOI,1910—lh-1000ooooooooooooooooo Annual Index of Prices Received for Michigan Poultry Pro- duCtS,l910-:UJ-1OO0.0000000000000000. Annual Index of Prices Received for Michigan Fruit CrOps, 1910-1." 8 100 0 O O 0 O O O O O O O O O O O O O O .I O O O 0 Annual Index of Prices Received for Michigan Truck Crops, 1910-1’4-100000000000000000.0000.co Annual Index of Prices Received for Michigan Miscellaneous CI‘OpS,19lo-lh.loo00000000000000.0000 Annually'Weighted Index Numbers of the Three Series, Which mQUOtedmontmy, 1910-11.].31000 o o o o o o o o o o o o 53 53 56 56 57 58 TAM? ’VTPE? -.- 1 \ 10 ll .. --‘_¢ - LPDPTWTY TABTfS ——.—.—-‘ ..r 0-.— v Q —.-.o cc—c Calculation of ionthlv Price Inicres for Rive Crowns and for Composite Index 0“ 26 Kichi~nn Farm Products Cclculation of Arnual Price Index for Index of 597' C‘C fl 7 i‘or Jan. lQ-L‘B o o o _rowns 9nd for Comrosite hi"an "Fr"? PTOdUPtS for lf‘.8 o o o o I o o o o 0 Annual Index of Iichi~cn Fruit Crops, Truck Crops, Kisccllaneous Crops, and Composite Index of 59 Products, 1 Index Numbers v“ in Iichi~an . Index Iumbers Iflchican . o v Index uunbers ' O in lichijan . Index Numbers wool Products ‘ Index Numbers in TEE/4’1"?“ 0 Index Wrrhers of Prices of Hichiran 26 Annual Irdex of Kicbifian Fruit Crors, Crone of Prices of Prices in Tichiea and Composite In? ‘3‘." Jan Paid to Producers i):"-"Q ’/,tg.'~..l o o o o o o o for 9 Cash Field Crons Paid to Producers for Vloooooooooo Paid to Preducers for 0.00.0.0... Per“ of 59 Prhducts, lqu‘bfl-hg o o o o o o o o KN Products .. . . . 0 Truck Crors, Yiscollaneous 131’“? A .- J c v- p ~4 \N ”‘6 .‘ RR 0 Armani? "runs (curt-rd) ----..--..— ——.-.-.—— TAB IE 177T. ’TZPP 13.1"” “o a G * Q a 13 Index Urmbers of Prices Paid to Producers CrODSi‘QI'i’lhi'PaTlooooo00000000000000.oooo on 1}}, Index If‘m"el's of Prices Paid to ProduC’rs “or 6 Peed Crone inlaiichifi'l-...o.........o.....oo..o... 91 1‘: Index Numbers “-1? Fri ccs Paid to Pr Luc'rs ;or 2 Dairy Products 16 Index ITLm‘JCrs of? Prices Paid to Producers for 6 Picnic Animals and '3001 PI’OdUCtS it"! I'riChi"fP-.T‘ o o o o o o o o o o o o o o o o o 0 QB 17 Index T’ix'mbers cf Prices Paid to Producers "‘or '5 Peultrjr Produc‘w ihl.:i-’3?Tifflnooooocococoo-00000000000000Q“ 18E'arY'etififIndexo...o......o............o'7" 19 Annual Index of Physical Volume of Par“ Predu~ts ‘r'srketed by IfiChiMTT FRI'T‘IQI'S, 1015.,2-1i'7 o o o o o o o o o o o o o o o o o o o o 100 I LIST 9g ILLUSTRATIONS FIGURE NUMBER P- ’1) (3 L4 1 Index of Prices Received.by'Michigan Farmers, 191041h I 100 Wéights 192h-28 and 193h'h3 o o o o o o o o o o o o o o o o hé 2 Index of Prices Received.by Michigan Farmers, l9lO-lh 100 Wéights 192h-28 and 1938‘h7 o o o o o o o o o o o o o o o o h? 3 Index of Prices Received for Cash Field Crops, l9lO—lh I 100 WEightS 192h‘28 and 193h-h3 o o o o o o o o o o o o o o o 0 be h Index of Prices Received:fiu°Cash Field Crops, 1910-1h I 100 Whights 192h-28 and 1938-h7 o o o o o o o o o o o o o o o o h9/ 5 Index of Prices Received for Dairy Products, l9lO—lh I 100 'Wéights 192h-28 and 193h-h3 o o o o o o o o o o o o o o o o 51 6 Index of Prices Received for Dairy Products, 19lO-lh I 100 Whights 192h”28 and 1938—h7 o o 0 Q o o o o o o o o o o o o 52 7 Index of Prices Received for Meat Animals and Reol, 1910-1h - 100, weights 192u-28 and 193h-h3 . . . . . . . . Sb 8 Index of Prices Received for Meat Animals and wool, 1910-lh . 100, Wéights 192h-28 and 1938‘h7 o o o o o o o 0 SS viii Amntrrf n 11’s”) '"IC" TPT’UT’WS: 7’71??er -, J .. I P‘fi‘. ”in r“ -, 1.1 w 4- v 1 7. ."' l I.ce- of rerr Proruc.s “arxeted, 1Q)!-Lj : ICO . . . . . . . . . 101 CHAPTER I INTRODUCTION Purpose of the studgw—Recent government legislation and economic events have stimflated the demand for reliable measurements of farm prices. An index-numbers series of prices received by farmers in the state of Michigan was constructed by Orion Ulrey in 193).; with the sta- tistical data available at that time. The chief purpose of this study is to construct a new index-numbers series of prices received by runners in Michigan using price data now available. ‘ An index-nmtbers series of prices received by farmers assists economists in analyzing the factors which influence farm prices. The response of ram prices to the changes in supply and other economic conditions in the past appears to be the most reliable guide to changes that may be expected under similar conditions in the future. In the long run, it is the consumer and not the farmer who has the greatest influence in detemining the pattern of agricultural pro- duction. When permanent changes in price relationships occur, changes in production may be desirable. A studsr of Michigan agricultural prices over a long period of years should be helpful in distinguishing between tenporary and permanent price changes. Similar studies have been made in most of the other states. The Bureau of Agricultural Economics has also prepared price indexes to cover the entire country. The combined information which may be ob- tained from these price indexes provide a basis for intelligent recom- mendations on many problems of productim and marketing. CHAPTER II REVIEW OF LITERATURE Early Contributions The latter part of the nineteenth century.-—-Measurements of price fluctuations were first made by English economists in the latter part of the nineteenth century. Alfred Marshall, C. M. Walsh, W. S. Jevons, and F. I. Edgeworth were among the first to make notable contributions. It was not until after the price upheaval which resulted from the eco- nomic effects of World War I, that Americans took an active interest in the use of index numbers for the measurement of price movements .y EarlL American index numbers .--The first authoritative index of wholesale prices used in the United States is that compiled by the Bureau of Labor Statistics. This index was first constructed in 1902 and at that time, it was an unweighted average of price relatives. The base of each relative was the average price of the given commodity for the years 1890-1899 inclusive. Bradstreet's index of wholesale prices was also developed before World War I; the index covers the period from 1892 to date. Bradstreet's index is constructed by reducing 96 staple articles of commerce to a "per pound” basis and the sum of the prices "per pound" is published; no systm of weighting is employed. The index is used as a barometer of business conditions. Another index which is widely quoted and is of historic signifi- y J. D. Black and B. D. Mudgett, Research in Agricultural Index Num- bers (New York: Social Science Research COW) , F73. 3 canoe is that published by the mercantile agency of R. G. Dun and Com- parw. It was first published in 1901, but the calculations have been carried back to 1860. Dun's index is a statement, in dollars and cents, of the cost of a year's supply, for a single individual, of an unpublished nmnber of staple commodities (believed to be 300). The index is designed to serve primarily as a measure of general changes in the level of whole- sale prices .y . These early indexes caused many differing Judgments about whole- sale price movements. The different measurements of price fluctua- tions recorded by these early indexes prompted Professor Wesley Mitchell to investigate the causes of the different interpretations. The re- sults of his study were published in July, 1915, and it encouraged the Bureau of Labor Statistics to discard the old average-of-relatives formula in favor of a weighted aggregative formula}! Mitchell con- cluded that there as need for a proper formula in the construction of a price index. The Period from 1915 to 1919: The Problem of the "Best Fomula" Conflicts of qpinion.—-Mitchell's bulletin and the continued price maladjustments after World War I brought forth an unusual outburst of literature on the use of index numbers and on the index number theory. In December, 1920, the American Statistical Association devoted the an- 2/ F. 0. Mills, Statistical Methods (New York: Henry Holt and Company, 192,4): PP. 229-53 _3/ W. C. Mitchell, Index Numbers of Wholesale Prices (Washington, D. C.: U. S. Bureau of W915). null meeting at Atlantic City to the problem of the "best" formula. Professor Irving Fisher presented a paper in which he proposed that the ”ideal" formula, more recently known as Fisher's "Ideal" Formula, be accepted as the "best" formula. He was smporfid by C. M. Walsh who had reached the same conclusion independently and from a different starting point. The meeting resulted in a sharp conflict of opinion on such questions as whether there is one best formula or whether dif- ferent purposes require different formulas , and what are the relative merits of variable weighted and fixed weighted indexes. The contro- versial issues were discussed at least until January,1936 when Wassily Leontief, in an article in Econometrics, reduced these spe- cific questions to their fundamentals .y In 1929, this lack of agreement among the authorities prompted the Advisory Committee on Social and Economic Research in Agriculture to include index numbers in its series of 21 subjects to be analyzed from a research standpoint. It was becoming increasingly more evident that the economic problems of agriculture could only be accurately in- terpreted by a knowledge and understanding of prices, volumes of pro- duction, incomes, expenditures, wage rates, farm real estate values, interest rates, tax rates, interest and tax delinquencies. In 1938, the Committee published Bulletin No. 10, Research in Agricultural In- dex Nunbers. The report undertook "to analyze the problems involved in constructing index series, to point out additional series that are needed and the problems involved in constructing than, and finally, to suggest lines which index number research may advantageously follow."§/ LI/ Black and Mudgett, op. cit., pp. 5-6. 5/ mm, pp. 1-3. The report was compiled by John D. Black of Harvard University and Bruce D. Mudgett of the University of Minnesota. Formulae used by agricultural statisticians.-Q-The report confirms the findings of 0. C. Stine and L. H. Bean who concluded that agricul- t1n°al index numbers were generally constructed by one of four formulae. These formulae are weighted aggregatives—in other words , agricultural statisticians have followed the lead set by Professor Mitchell in his bulletin published in 1915 and later staunchly sxqaported by Dr. Warren M. Persons, formerly of Harvard University. The formulae were ex- pressed as follows :éf TypeA PIQO Poe. Type B "P”l' 'Q'o " Pom Qo Pl Qcm “9° ° P. Qcm quom I3cm Qcm TypeD The terminolog used in these formulae were: P1 = Price given month, Po 3 Average annual price for base period, Pom: Average price for corresponding months in base period, Q0 3 Average quantity per annum for base period, 0,: Average quantity for corresponding months in base period. The limitations of these formulae are: 9/ A. G. Black and D. D. Kittredge, "State Indexes of Prices of Farm Products," (Journal of Farm Economics, July, 1928), p. 312. Type A. This type of index measures the fluctuations in value of a fixed imaginary cargo consisting of specified quantities. It fails to represent accurately the farmers' national wagonload which varies both in quantity and contents from month to month. Type B. This formula has the same limitations as type A except that seasonal variations in prices obtained during the base period are eliminated. Type C. This is similar to type A except that it is weighted by monthly sales rather than by yearly sales. It will give a measure of the value of a "load" for each month. However, the quantities actually marketed in a given month will not agree with the normal monthly weights where marketings vary from year to year. Under such conditions, this type fails to measure accurately the real situation. Type D. This formula has the some limitations as type 0 when marketings differ from the so called "normal." Seasonal variations in price are eliminated.” It has been contended by King and Stine that a "pure price change" for a group of comedities can only be measured when the effects of a quantity or volume change which accompanies a price change are elimi- nated. Formulae, type A, B, C, and D meet this condition. Fisher, on the other hand, probably thinks that there can be no true measure of price change for a group of commodities that does not take account of any quantity or volume change that accompanies the change in price. Mudgett accepts Fisher's "Ideal" Formula as the best measure of his- torical. change and agricultural statisticians at the University of 2/ Ibid., pp. sis-11;. mmesota use it in a modified form. Comparable farm price indexes are also used at the Colleges of Agriculture in Ohio and Wisconsin. Weight correlation bias.--Fisher contends that the accuracy of Q/ an index number depends on four factors: 1) the choice of the formula, 2) the assortment of items included, 3) the number of items included, h) the procuring of original data. He further contends that the greatest source of error is in the selec- tion of the fomula and illustrates that this source of error can be reduced to less than one-tenth of one percent by using the "Ideal" formula, fl . 23.1.9}. providing the three remaining sources 2P0 Qo 21’s 01 of error are eliminated. The principal source of error in conventional types of fixed-weight 2P Q aggregative formula, derived from either Laspeyreso formula, 21D1 Qo dsri - o 0 or M m Paasche's formula, 2P1 Q1 is what Warren M. Persons 2P1 Q1 ’ calls "weight correlation" bias. By weight correlation is meant corre- lation between changes in weights and changes in prices. In periods of rising prices and expanding business, quantities of goods in the market greatly increases. When prices decline, quantities of goods in the market decrease. In either situation, the P's and Q's will be positively correlated. The normal relationship for farm pro- ducts is for prices to remain constant or te rise when quantities are decreased; or a negative correlation. Persons found that the existence of an inverse correlation between prices and quantities of twelve _8_/ I. Fisher, The Making of Index Numbers, (Boston: Houghton Mifflin Comany, 1922), p.7h2. 8 leading crops in the United States had a noticeable effect upon index numbers .2/ Fisher lists four different methods of weighting an index as fol- lows : 1) base year price x base year quantity, 2) base year price x given year quantity, 3) given year price x base year quantity, 1;) given year price x given year quantity. If we assume a period of rising prices and a high and positive correlation between the P's and Q's, the index numbers will be biased upwards if P1 Q1 weights are used and will be higher than if Po Q0 weights are used, for example: Prices Po P1 P18 iron 1.00 2000 Corn 1.00 1000 P0 (Po Q0) Pig iron 100 Corn 1.92 Values 200 Indexes, using Po Qo weights 100 P0 (P1 91) Pig iron 1:00 Corn 100 Values 30—0 Indexes, using P1 Q1 weights 100 Quantities Q1 200 100 Weights Pe Qe P1 Q1 100 1:00 100 100 200 500 Qo 100 100 P10-30 Qo) 200 100 300 150 P1 (P1 Q1) 800 100 900 180 2/ J. D. Black and B. D. Mudgett, Research in Agricultural Index Num- bers (New York: Social Science Research Council; 1938), 29. 9 In the case of declining prices and quantities, the same illustration will also give the P1 Q1 weights the lower index number. In the case of the two remaining systems of weighting, Po Q1 and P1 Q0 (Fisher's type 2 and 3) the same illustration will show similar indexes lying about midway between the first two systems of weighting (Fisher's type 1 and )4). With an inverse correlation between the prices and quantities, the Po Q1 weight (type 2) will produce the highest index mmbers and P1 Qo weights the lowest with prices domi- nantly rising; the reverse is observed when prices are rising and quantities fallinggg/ Elimination of weight bias.—The method which Fisher proposes to correct weight bias is to combine two fonnulae which possess opposite biases. He contends that a bias free formula must conform to the re- liability of the factor reversal as well as the base reversal test; the "ideal" formula meets both of these requirements. Albert G. Black and Dorothea D. Kittridge very ably defend the Minnesota formula, E [Pl Qcmo ] X 2&1 Qcml :L, which is de- ZE’cmo Qcmo EEcmo Qcmll rived from the "ideal" formula. They contend that-it gives a more accurate picture of the real changes in the price level than is pos- sible when constant weights are used. They further contend that in the construction of agricultural price indexes, constant weights should be avoided because of the extreme fluctuation in crop production each year; this is fundamentally the same premise put forth by Dr. Fisher. 2-] .1_°/ lbid., pp. 23-29. .1_1/ Black and Kittridge, _C_>_p_. 333., p. 321. 10 The distinction between fixed weights and variable weights chang- ing from year to year or month to month is largely one of degree. There seems to be general agreement that weights need to be changed from time to time as the processes of economic change shift the mag- nitudes of the components of the index numbers. This practice is followed by the Bureau of Labor Statistics, the Bureau of Agricultural Economics, and by statisticians constructing agricultural price indexes for use in regions and states. Development of the Index-Number Series Published by the Bureau of Agricultural Economics Early index-mmber series.-—The first comprehensive index-number series of prices of farm products was constructed by George F. Warren and published as United States Department of Agriculture Bulletin 999, Prices of Farm Products in the United States, 1921. In 1921:, Dr. 0. C. Stine and L. H. Bean developed the fixed-weight aggregative series now published in Grape and Markets. This series was revised by Arthur G. Peterson in 19314 and again in 1916. The base period selected for the prices received index of the B. A. E. is the period from August 1909 through July 1911;. It has been used since 1921. The primary consideration in the original de- cision to accept this period for a base was the fact that these years constituted a period in mich the prices of farm products were rela- tively stable. The Department of Agriculture did not start to gather price data on farm products until 1908. The economic disturbances caused by World War I brought maladjustments between farm prices and farm costs which can be emphasized when using the prewar base. This period has been retained as a base period partly because it has been specified in various laws enacted relating to parity prices. Weights.-—The weights now used are annual average sales of farm products for the period 1935-39. Price series for commodities included in the index were weighted by the quantities of the different commodi- ties sold, with adjustment to give some representation to crops not in- cluded in the index. Forty-eight items are included in the index which represented about ninety-two percent of the total cash income from mar- ketings in the quantity base period. Seasonal variation.-Indexes of seasonal variation have been con- structed for forty-two out of forty-eight of the products included in the index. These indexes are based largely on averages for the period 1922-lal. The adjustment for seasonal variation makes an occasional one percent change in the over—all index of prices received by farmersalég/ mw-The index as it is now cmstructed will meet-the time re- versal test, but it will not meet Fisher's factor reversal test. It is not likely that a formula such as Fisher's "Ideal" will be adopted by the Bureau of Agricultural Economics because: "With respect to mov- ing average weights, personally, we believe that the operational prob- lems involved in the use of a moving average of quantities for weights outweigh theoretical advantages, and that there are more effective means of changing weightsJAJ/ Policy of the Bureau of Agricultural Economics.—The retention of l-S/ A. G. Peterson, Index Numbers of Prices Received by Farmers, 1910-16. (Washington, D. 0.: United States Department of Agricul- mureau of Agricultural Economics, 191th), p. l-12. l-Z/ Letter written by B. R. Statfller, Bureau of Agricultural Economics, Washington, D. C. to C. J. Borum, Bureau of Agicultural Economics, Lansing, Michigan, April 8, 19h9. 12 1909-11: as the base of the index of prices received by farmers has been criticised in some quarters. However, various laws enacted dur- ing the past fifteen years relating parity prices for agricultural pro- ducts to the 1910-11; period makes a. change undesirable. In 1910 an in- terdepartmental committee of the Federal Government reviewed the many national index number series and recommended the adoption of a common base period 1935-39 for all series that might be adjusted to this base. In accordance with their recommendation, the Bureau of Agricultural Economics is now publishing the index numbers series of three major series on this base. A Survey of State Index Number Series Types of formulae .--In a survey of thirty-two state index-numb er series of prices received by farmers it was found that only four states have annual price index series running back to the Civil War period- Maryland, Virginia, New York, and Wisconsin. Four use formulae other than the fixed weight aggregative type-Minnesota uses the “Ideal" for-' mula for both its annual and monthly series; Ohio uses the "Ideal" for at annual series only and Wisconsin for one of its historical annual. series; Iowa uses a geometric fomula. According to Stine's classifi- cation, of the fixed-weight price index formulae currently-used, four- teenareTypeA, tenareTypeB, fourareType C, andfourareTypeD. The number of commodities included in these series ranges from nine to thirty-five and the percentage of gross income received from the sale of the products included ranges from sixty percent to ninety- seven percent. The adequacy of these fixed-weight aggregative formulae for state 13 index-number series is much more questionable than when used by the Bureau of Agricultural Economics to include the entire country. The quantities used for weights in a limited area such as a state may be poorly correlated with prices of products which are nationally if not worldly determined. This means that prices and quantities marketed are likely to have no correlation. Furthermore, in a single state, most of the output may be attributed to a very limited number of products, giving weighting an unusual bias. Congrison of results obtained from various formulae.-—The stucw, Research in Agricultural Index Numbers, contains a comparison of the results obtained from the "Ideal formula against the results obtained from the fixed-weight aggregative type of formula for the same data in the states of Minnesota, Wisconsin, Ohio, and Alabama. The two Minnesota series run very close together throughout a period of twenty-five years; the fixed weight series occassionally run a little higher than the "Ideal" series but never more than two points. Three series were compared in Wisconsin (hiring this same period; the "Ideal, " the Paasche and the fixed-weight aggregative formula. The same trends were shown but the divergence between the Paasche and the fixed-cweight formula was eight points in 1919 and the divergence be- tweul the ”Ideal" and the fixed-weight aggregative formula was five. The same general observation applies to Ohio and Alabama. The general conclusion which can be arrived at from this review of literature on index number construction and theory of index numbers is that there is a wide divergence of opinion as to the type of formula 11: which is most suited to measure price fluctuations in our economy. The crux of the problem is a matter of definition; what is an index mailer supposed to measure? There is the school of thought than con- tends that a "pure price change" is all that should be measured in a price index-numbers series. On the other hand, Drs. Fisher and Mudgett contend that any price change is always associated with quantity change and that any measure of price that does not take account of this chang- ing importance, or quantity is actually wrong. The "Ideal" formula does have the advantage of meeting the exact- ing factor reversal test and eliminates undesirable weight biases. However, due to the operational problem of the formula, its popularity is limited and there is little reason to believe that it will be used more widely in the near future . 15 CHAPTER III THE INDEX-1mm SERIES OF PRICES RECEIVED BY MICHIGAN FARMERS, 1910-h9 Description History—The index of prices received by Michigan farmers now used was constructed by Ulrey in 19314. It was published the same year by the Michigan Agricultural Experiment Station in Technical Bulletin No. 139, Michigan Farm Prices and Costs, 1910-3h. Since that time, the index has been revised and the revisions have been published as supplanents to Technical Bulletin No. 139. Type of index.-According to Stine's classification the index in Type A is the one most commonly used by agricultural statisticians. A weighted aggregative formula is used in the index. 3.3.3.941” five calendar years 1910-11; were chosen for a price base period. A comparable base period has been used by the Bureau of Agricultural Economics and the majority of state agricultural colleges and experiment stations. The use of a common price base by these dif- ferent agencies makes it possible to readily compare farm prices through- out the country. Weights.—-The index measures price fluctuations of twenty farm pro- ducts sold by Michigan farmers. These products were the source of eighty-eight amd four-tenths percent of the average annual Michigan cash farm income for the years l92h-28 which were selected as the weight period. The twenty products selected are broken into five small homogene- 0 us groups; newly, feed crops, cash field crops, dairy products, meet animals and wool, and poultry products. Livestock is adequately 16 represented by 99.7 percent of all livestock and livestock product sales during the period considered. The field crop group is repre- sented by 89.9 percent of all field crop sales for the period. Fruits and vegetables are represented only by apples and they are placed in . the cash field crop group. Apple sales during the years 19214-28 repre- sented only 25.1 percent of the cash return to farmers from the sale of fruits and vegetables for this period. Unitations.-The limited number of commodities included and the grouping of these commodities are definite weaknesses of the index. At the time the index was constructed, price data were available for only twenty products so the selection of the commodities was limited by lack of data. The grouping of the twenty products conformed closely to the pattern followed by the Bureau of Agricultural Economics. How- ever, prices for apples were the only data available for fruit and veg- stables and with such limited data it was not possible to construct an index for these groups. Rather than eliminate apples from the index, they were put into the cash field crop group. The price base period selected is comparable to that used by the Bureau of Agricultural Economics and the majority of state agricultural experiment stations. However, since 1910-11; the economy of the country has been subjected to two world conflicts which have caused changes in the general price level until it is now inadvisable to compare price relationships which existed at that time to those of 1919. Furthermore, by using a 1910-111 price base, present prices are compared with prices which prevailed during a period when agricultural production techniques were not comparable to those which are now used. The Bureau of Agri- cultural Economics has taken cognizance of this situation and publishes 17 three of its principal price index-number series using the 1935-39 price base as well as the 1910-11; base. The least significant limitation of the index is the formula se- lected. The limitations of the weighted aggregative formula have been outlined by Fisher, but in spite of his criticisms the weighted aggrega- tive formula is widely used by agricultural statisticians. The limitations of the formula are resolved to the question of just what the index is supposed to measure. Fisher and his followers contend that the quantities marketed must be considered when price movements are measured. The weighted aggregative formula measures price only and does not allow for changes in the quantities of the different products mar- keted each year or month. Furthermore, it is contended by some authori- ties that if the index is affected by the quantities marketed during the period for which prices are being measured, the index should be classi- fied as an income index rather than as a price index. Needs and Resources for a Revision Monl'he weights used in the index of prices received by Michigan farmers were obtained from the average annual sales of products sold from Michigan farms during the period l92h-28. These weights should be revised to conform with more recent marketing trends in Michigan in order to slim- inate much of the weight bias that may be present in the index. The revised weights should be taken from ten year averages of market- ings rather than from five year averages. Weights derived from ten year periods of marketings of farm products will offset the effects of live- stock production cycles and the effects of weather on field crops, fruit crops, and vegetable crops. 18 Data for more commodities are now available. It is desirable that the products included in the revised index be arranged in more homogeneous groups. This would permit specialized producers to study the price level of their products in relation to all farm prices. In order to accomplish this objective, fruits and vegetables would have to be more adequately represented than they are in the index now used. Perishable crops, which are marketed in Michigan for very short periods each year, should be included in the index in a manner that does not permit them to influence the index when they are not being sold by Michigan farmers. This could be accomplished by constructing two index-number series—one series to be calculated monthly which would include those products for which monthly price quotations are available, and a second series to be calculated annually from the weighted annual average prices of the majority of products sold by Michigan fanners. The monthly index-number series would conform closely to the grouping in the index now used in Michigan. The annual index would include all of the products included in the monthly series plus additional groups to adequately represent fruits, vegetables, and mis- cellaneous crops. Agricultural legislation which defines parity will make it desir- able to retain 1910—11; as one of the price bases when the index is re- vised. However, it is desirable also that a more recent price base be selected for the revised index, preferably 1935-39. The index now used could be spliced to the revised index. It would be possible to publish index numbers using two price base periods, which would confonn to the pattern set by the Bureau of Agricultural Economics. l9 Resources.-The Bureau of Agricultural Economics has collected monthly price data from 193h to the present for 59 Michigan farm pro- ducts. This data would permit the annual index of prices received by Michigan.farmers to be revised from 193k, to include 59 products rather than the present number of 20 and to\increase the groups from five to eight. Mbnthly price data are available for 26 products and seasonal prices are available for 33 other products. 20 CHAPTER IV PROPOSED REVISION l9h9 Procedure Commodities.- - Fifiy-nine products were selected to represent sources of farm income in the revised index of prices received by Mich- igan farmers. Dairy cattle, nursery products and forestry products were omitted from the index due to the lack of adequate data. Dairy cattle sold for slaughter were accounted for by sales of beef animals. Price data were available for prices received by farm- ers for the sale of dairy cattle which were tobe used as dairy cows. However, data on the nusbsr of animals sold for chiry purposes were not available. Under such conditions it was impossible to cbtermine ilat portion of farm income was derived from this source and con- sequently dairy cow prices were omitted from the index. Fare incom from the sale of forestry products is estimated annually by the Bureau of Agricultural Economics. The Bureau does not estimate the amounts of the different products sold, nor does it eetinate the prices received. Specific data pertaining to quantities marketed and prices received for forestry products In farmers in Michi- gan were not available. For these reasons and the fact that revenue fru the sale of forestry {abducts represented less than one percent of Michigan farm income, forestry products were omitted from the in- dex. Nursery products were also omitted from the index for reasons similar to those used to justify the omission of forestry products. In addition, nurseries in Michigan are limited to areas close to the large marketing centers and the production of nursery products is a 21 specialised activity carried on by only a small minority of Michi- gan farmers. m.- - The Bureau of Agricultural Economics collects price data on almost all products sold by Michigan fanners, as of the 15th dw of each month. Quotations are collected for perishable seasonal crops only on the 15th dv of each month while the crops are being marketed. The fifty-nine products were first divided into two groups; those for which continuous monthly price data were available and those for which only seasonal price data were available. The two groups were then regroupsd into eight smaller and more homogenous groups which conformed as closely as possible to the grouping used by the Bureau of Agricultural Economics. Those products included in the grow for which monthly prices could be obtained were regrouped asicash field crops, feed crops, dairy products, meat animals and wool, and poultry products: (Table 1). These groups were made up from 26 products. The Ruining 33 products were classified into three groups - - fruit crops, truck crops and miscell- aneous crops. The effects of seasonal price variation on the index was partially revved by the srranganent of the groups. Two index number series were constructed - one series contained 26 products for which monthly price quotations could be obtaimd and the second series contained all 59 Pro- ducts. The series made up of 26 prodmts was calculated monthly, and the series containing the 59 products was calculated annually. The primary reason for constructing the two series was to eliminate the effects of seasonal price variation of fin fruits and vegetables. 22 Table l - Groups of Products in Revised and Unrevised Index- Number Series of Prices Received by Michigan.Farners Unrevised series Cash field.cropg Field‘beans Potatoes Wheat Red.clover seed Rye Apples Feed,crops Alfalfa hay (loose) Cor! Oats Barley Dairygprodncts Wholesale milk Butterfat Heat animals and wool Poul ‘ ducts Chickens Eggs Fruit crops (Apples included with field crops) Revised series Field beans Potatoes 'Wheat Alfalfa seed Red clover seed Sweet clover seed Alsike seed { Flazzseed. Soybeans Alfalfa.hay (loose) Corn Oats Barley Rye Buckwheat Wholesale silk Buttertat Hogs Beef’cattle calves Fool Chickens Eggs Apples Peaches Cherries Grapes Pears Flu-s Strawberries -.- . - 23 Table l - Continued Unrevised series Revised series Truck crops for calming Lima beans Snap beans Beets Cabbage Sweet corn Cucumbers Peas Tomatoes Truck crops for market Asparagus Snap beans Cabbage Danish cabbage Cantaloupe Carrots Celery (early) Celery (late ) Cucumbers Onions Tomatoes Miscellaneous crops Maple syrup Maple sugar Peppermint Speamint Popcorn Honey Sugar beets M" - An index of the volum of products marketed by Michi- gan tar-ere iron the year 1921; to 19h? was constrmted in order to help select a series or years which represents the present marketing pattem offarmproducts andatthe santiube applicablein the nearfuture. mu- mh deliberation two experimental periods. 193h-h3 and 1938-10, were chosn as being slitabls to represent the sales or farm prohcts by Michng tamers. The price or farm products and the quantity sold determine total 141/ See Amanda: 1. e . . . _- .1 e . —. u . _. . e . —. .. . i e I u .4 -.. _ ' \ _ in e-v. ... 4‘ .. * e .- - -. . on- ., .. , 7.7. . u -- . . e. - . a .. e c . _. . ------ . a- - _ ...- o’- -- — .. - -- o . - e -_ | n. .- ‘ ..o—e v . . . , . .. _ . ...- _- l . - .‘ a , - 1 u ‘ d n o. ’ " ‘- . '- . . . _ — ‘ . . ‘ .. . _. v . ~ . q .- . 7 x .- .1 - .4 .. ’ d _ a - ‘ _. o ‘9 . ~ ‘ “ v‘ ,-< ,, . v .o,‘ _ l e - ‘ ‘, , n ‘—r 4 ‘ 7 el- . '— ..- n J b- s . _ u . l . I l \' t . . - .o .. . . ' ‘_ 5 . l ‘g 7‘ o l‘ ». _ .. . .t ‘ ....- ~. . . t 2b mceipts received by farmers. The importance of the nunber of pro- ducts selected for an index of prices received can only be determined by cmaring the value of the sales of the selected products against tb total receipts received from the sale of all farm products during tin sen period. This procedure was followed for both “weight" per- ieds and it was found that when the value of forestry and nursery products were included the value of the sales of the selected products represented 96.2 percent of flichigan farmers cash income for the ten year period 19314-10 and 95.5 percent for me 10 year period 1938-h7. (Table 2). Table 2 - Annual Average Value of Sales of Selected Products in the Revised Indexes as Compared with the Total fliehigan Cash Farm Income Height Sales of selected To Michigan cash Sales as percent period products (900) farm income (000) 7 of income l93h-h3 $261.,716 $2614, 776 . 96.2% 19384;? “01,235 31:20, 070 95.5% “Eh-enth- - The above data clearly indicates that the maj or some» of Michigan farm income were represented in the revised index. However, it was considered desirable to determine what products or me of products were not adequately represented. This was done by breaking the value of the total sales of the selected products into five groups and comparing the value of the sales of these sehcted products with the total receipts received by Michigan famers fit the five com-- parable groups of products (Table 3). . . _ _ . c e V a . o . . . . 1 K e . — . _ . o o . D\ .. - I . . e v e . a . . .. c i . Q . '4 .. . _ .5 . tn .. . I . . . ~ .. 3 n A w . . —. . I a. u . - a n . I .. . . . e\ .. . e .- I - . . . . . w ' i . . v.1 ‘ e. v. I ‘ . . i 2 ~ _. . . i . C e . i. . .. . A . . i .. . a , 25 Table 3 - Comparison of Anmal Average Value of Sales of Selected Products for the Revised Indexes as Compared with the Total Michigan Cash Farm Income Received by Groups Sales of selected Cash arm Sales as percent Groups products (000) 7 income (000) of income Weights 193h-h.3 livestock & products $166,639 $167, 217 99.6% Field crops h8g978 50,100 97.1 Fruit crops 17, 529 , 17, 969 97.5 Truck crops 11,812‘1 19, 5215; 60.5 Miscellaneous 9 7 9 9 77 99.7 coon Tater wit—‘5, 91 m Weights 19384:? livestock & products 3265, 251 $266, 977 99 .3% Field crops 714, 990 75.51114 99.2 Fruit crops 27,158 31,272 88.0 Truck crops 3,? illJSI 62:2) Miscellaneous 3 7 99 Total m 136E731 9326 The above data shows that fieldcrops, fruit crops and truck crops were not satisfactorily represented in the data available for the period 19313-443. The quantities of the different products in the fruit and truck groups were adjusted until the annual average value of the sales of the products included in each group were equal to the receipts re- ceived by formers for the sales of fruits and vegetables (Table h). Fruit products were adjusted by adding 2.5 percent to the estimated average annual quantities sold by farmers for the years 19314-16. The products listed in the truck crop group were adjusted so that the total valm of the sales of these products was increased by 39.5 per- cent which made them equal the receipts by farmers for the sale of truck crops. The total adjustment of truck crops was home by the a. p. i _ l u . I .- 9 on 9» Q o. Pa .. .. at s\ Q Q ‘o . c . a . n O u _ J . . i a . . a e l . v . .. t . Q. t. . . . .. t t t — v C l. _ ‘ e e e e e, e e e e e 0 a 26 market truck crops. It was assumed that the estimates of quantities sold for manufacture were adequate for the period considered. The field crop group was not adjusted, for the 2.9 percent short- age, in order to make the products represented equal the value of the receipts from the sale of field crops by Michigan Farmers. Lack of statistical data made it necessary to estimate the amounts of red clover, alsike, alfalfa and sweet clover marketed from 19314 to 19140 by calculating a regression equation for each product. 15 This was possible because the production of these products from 1931; to date was available and the amounts marketed from 19140 to date was also a- vailable. In view of these circumstances, further adjustments were not made to field crops. Fruits and truck crops were the only two groups adjusted for the 19384;? "weight" period. The fruit group was adjusted by increasing the amount of each product represented by 12 percent. The truck crop group was adjusted by increasing the quantities of the market crops represented until the total value of the sales of truck crops for the period was increased by 38 percent. Truck crops sold for manufacture were not adjusted. . A ten year average was selected to represent the quantities of the different pro diets marketed instead of a five year average. This was done in order to offset the effects of livestock production cycles and the effects of weather on crops. Sweet clover seeds I " 77.73 - .000h82 . Alsike clover seed: 1 = 86.327 4 .00153X2 - 0569X3. Red 010m 893d: XI = 58.29 + sO?8358X2e Alfalfa seed: 11 = 614.23 - 00000672X2. (‘ I. 'O 27 Table 14 - A Comparison of the Adjusted Weights of the Revised and Unrevised Index-Number Series of Prices Received by Michigan Farmers 7 Unrevised weights Revised weights; Revised weights Products 19214-28 19314-83 193 84;? Cash field crops Warm, cit. 3,512,000 14,110,000 3,938,000 Potatoes, bu. 17,160,000 13,610,000 11,1814,000 Wheat, bu. 13,229,000 9,213,000 11, 8814,000 Alfalfa seed, bu. 38,000 65,000 Red clover seed, bu. 86,800 78,000 100,000 Sweet clover seed, bu. 15,000 13,000 Llsike seed, bu. 19,000 19, 000 Fla: seed, bu. 65,000 55,000 Soybeans, bu. 560,000 1,1148,000 Feed cro' ’ a 13y (loose) tons 320,000 327,000 3147,000 Corn,bu. 9140,000 2,782,000 3 322,000 Oats, bu. 8,100,000 3,879,000 5,806,000 Barley, bu. 556,000 1,092,000 1,323,000 Rye, bu. 1,719,000 531,000 353,000 Buckwheat, bu. 155,000 209,000 W ' , cwt. 17,696,000 25,683,800 33,258,600 Butterfat, 1b. 76,635,1400 55,6014,000 147,779,000 Meat animals & wool H088, MO 23038,“) 2,039,730 2,550,770 3061‘ cattle, cwt. 2,192,000 2,637,020 3,176,900 Calves, cwt. 671,000 620,1400 627,750 Sheep, cit. 98.000 156, 710 1117,1190 Labs, cwt. 699,000 508,900 £512,250 Wool, lbs. 7,802,000 7,393,000 5, 820,000 Poult edicts 133.29%, 15s. 146,688,000 57,8146,100 70,609,000 Eggs, dos. 614,750,000 87,350,000 2101,1417,000 Turkeys, lbs. 6,583,000 9,616,000 Fruit crops lpples, bu. h,377,ooo 6,928 200 6,902,000 Peaches, bu. 2,68 ,100 3,910,000 Cherries, tons 33.3149 112,979 was to” 393521 3 Peers, bu. 1,000,000 856,000 Plus, tons 14,150 14,259 Strawberries, crates 7714,300 762,000 '\ 'O (Q 0‘ 05 O I D\ 0‘ ck .. o '5 Ox - Cw 9\ fix Ox 0\ .\ fix an '59. --‘o - --.- P. 28 Table 14 - Continued ‘ ' ’ “ ‘W"""‘ l92h—28 193h-h3 Products Truck crops - Manufacture Lila beans, tom 1,507 1,200 Snap beans, tons 8,290 8,270 Beets, tons 14,900 6, 880 Cabbage, tons 6,870 7,180 Sweet corn, tons 5,1;140 14, 550 Cucumbers, bu. 1, 5147,000 1,7148,000 Peas, tons 8,628 8,1428 Tomatoes, tom 2931-170 37,3110 Truck cram - Market Isparagus, 2M crates 510,000 851,000 Snap beans, bu. 1400,000 14614, 000 Cabbage, tons 140,367 514,000 Danish cabbage, tons , 22,000 Cantaloupe, 7W crates 8114,600 672,000 Carrots, bu. 959,633 1. 323,000 Celery, early, crates 1, 721,000 2,0147,000 Celery, late, crates 2,8149,500 3,667,000 Cucmbers, bu. 150,000 220,000 anode, 50# sacks 6,388,900 6,877,000 Tomtoes, bu. 1,706,1400 2,015,000 Miscellaneous We syrup, 83130 96,000 96,503 “EPIC sugar, lbs. 12,” 8,2“) Peppermint, lbflo ng 395,”) Spearmint, lbs. 80,600 79,700 Popcorn, cwt. 36,060 32,6314 Honey, lbs. 9, 819,100 8,603,000 Sugar beets, tom 857,000 790,000 Base for prices.- - The price base selected for the revised indexes was the five-year Period 1935-39. During this period, Hichigan Agricul- tural prices were not disturbed by the economic effects of World War II. The Bureau of Agricultural Economics has selected that period as a price base for three or its principal index-ember series. The mighted average annual prices of the 59 commodities were calculated on a cal- endar year basis for the period between January 1, 1935 and December 31, 1939 and used as the base prices. I\ 'w 29 The base prices were used to determine the base values of each comedity and of each group. This was done by multiplying the aver- age annual quantities of the 59 commodities sold during the two ten- year periods 19314-143 and 1938-147 by the base price and then determin- ing what percentage the group base values were of the total base values (Table 5-8). Table 5 - Base Values and Group Weights for Monthly Index of Prices Received by Michigan Farmers, Using 19314-143 Weights Grows 1 Base values 1 Weights Cash field crops 1 $31,298,770 ‘ 17.87% Feed crops 7, 5014,660 14.28 Dairy products 61,1114,17h 3h.89 Meat animals and wool 146,1;147,129 26.53 Poultry products 28 783 816 16.173 Total $175111I8‘I‘5119 10"05'0. Table 6 - Base Values and Group Weights for Annual Index of Prices Received by Michigan Farmers, Using 19314-443 Weights Groups Base values [ Weights Fast: field crops ‘ 8 31,298, 770 1 114.814 Feed crops 7, $014,660 3.56 Dairy products 61,1114,171.L 28.99 Meat animals and wool 146,14147,129 22.03 Poultry products 28,783,816 13.65 Fruit amp! 13,900,81‘6 6059 Truck crops 114,380, 865 6.85 Miscellaneous products Total 7 363 0314 3419 $510, 793.2911 100.56 30 Table 7 - Base Values and Grow) Weights for Monthly Index of Prices of Michigan Farm Products, Using 1938-147 Weights Groups I Base values LWeights Cash field crops 1 3 32,517,960 16.22% Feed crops 8, 783.350 11.39 Dairy products 71,871,078 35.83 Heat animals and wool 513,030,062 26.1414 Poultry products 3 331 110 17.12 Total 52(1), 533, $0 100.00 Table 8 - Base Values and Group Weights for Annual Index of Prices of Michigan Farm Products, Using 1938-147 Weights Groups Base values J'fleights Gash field crops 8 32. 517, 960 13.56 Feed crops 3,783,350 3. Dairy products 71, 871,078 29.98 Heat animals and wool 23,030,062 22.12 Poultry products 314, 331,110 114.32 Fruit crepe . 15. 575.1149 6.50 Truck crops 17,072, 876 7.12 mscellaneous products 6 5714 7140 2.714 Total 723977561725 m Formula.- - The formula selected for the revised index was type '1' the sane as used by Ulrey when he constructed the first index of prices received by Michigan farmers in 19314. It is also used by the Bureau of Agricultural. Economics and in the majori'lw of farm price in- dex-mniaer series constructed for the States. The type 'A' formula has tm limitations; namely, adjustments are not made for seasonal variations in the quantities of the various commod- ities marketed, or for seasonal price variations. However, investi- gations nude by the Bureau of Agricultural Economics, Ronk of New York, Ulrey of Michigan and Youngstrom of Idaho have shown that adjustments 31 for seasonal variations have little affect on the final result of the composite index-number series. Furthermore, if complete adjustments are made for seasonal and annual marketings the final result would be more accurately described as am income index-number series. In view of these considerations, and the fact that the type "A" index is maintained monthly with a minimum of labor, it was considered advis- able to continue to use the type ”A” form of index with the weigited aggregative formula. The Revised Index-Number Series Procedure.- - Two index number series were calculated. The pro- cedure, prices and formula used were identical. However, a different set of weights was used for each series which accounts for the differ- ences which occur in the index numbers when the two series are com- pared (Tables 9-17). Table 9 - Annual Index Numbers of Prices Received by Michigan Farmers for 59 Products, 1935-39 = 1(1) 32 Table 10 - Annual Index Numbers of Prices Received for Michigan Cash Field Crops (1), 1935-39 - 100 Using 93 v Using 193- Year weights weights 19314 93 95 1935 814 80 1936 126 123 1937 135 137 1938 73 78 1939 82 82 19110 96 914 19141 117 116 19142 1146 - 11414 191:3 196 192 191414 196 1914 19145 206 . 203 19146 2140 2140 19147 310 310 19148 2614 2614 (I; F'i’e‘ldbems, potatoes, wheat, alfalfa seed, red clover seed, sweet clover seed, alsike seedL flax seedLsoybeans. Table 11 - Annual Index Numbers of Prices Received for Michigan Feed Crops (1), 1935-39 = 100 191.3 158 161 191414 193 195 19145 195 19h 19146 . 210 211 19147 261 262 19148 2h8 2 51 Whey (loose), corn, oatsTbarEy, rye,Tuckwheat. 32 Table 10 - Annual Index Numbers of Prices Received for Michigan Cash Field Crops (1), 1935-39 a 100 191414 196 1914 19145 206 . 203 19146 2140 2140 19147 310 310 19148 26h 2614 (I, F'ieldbems, potatoes, wheat, alfalfa seed, red clover seed, sweet clover seedL alsike seedL flax seedLsoybeans. Table 11 - Annual Index Numbers of Prices Received for Michigan Feed Crops (1), 1935-39 '-'- 100 19141 98 99 19112 1314 135 19143 158 161 191.14 193 195 19145 195 1914 19146 , 210 211 19147 261 262 19148 2148 251 Why (100867, corn, oatsflarley, rye, buckwheat. 9-. .u , e (I {I e . It; . 33 Table 12 - Annual Index Numbers of Prices Received for Michigan Dairy Products (1), 1935-39 - 100 Using 193 Using 193 7 Y“? weights weights 19314 83 83 1935 93 9h 1936 105 106 1937 1114 1.114 L938 95 95 1939 93 91 191.0 103 103 19141 123 123 191.2 1115 1145 191.3 183 ~ 187 191.1. 188 187 191.5 186 185 191.6 225 226 191.7 2148 21.9 191.8 277 277 111 ficlesale milk, butterfat. Table 13 - Annual Index Numbers of Prices Received for Michigan Meat Animals and Wool (1), 1935-39 8 100 Using 19317-5 Using 53 E7 1"” weights weights 19314 59 58 1935 96 96 1936 100 100 1937 113 112 1938 96 97 1939 95 95 191.0 914 93 191.1 121 120 191.2 156 156 191.3 169 169 19111: 161 161 19145 175 175 191.6 216 217 191.7 277 280 19118 297 299 Hf Hogs, beef cattle, calves, sheep,fi.l.ambs,1wool. 4.- 314 Table 114 - Annual Index Number Series of Prices Received for Michigan Poultry Products (1), 1935-39 I 100 Using 193 Using 193'- ‘ Year weights weights 19311 77 77 1935 109 109 1936 103 . 103 1937 102 102 1938 100 100 1939 86 86 19140 87 87 191.0 109 109 19142 138 138 19113 172 . 172 191.1. 153 151. 191.5 180 180 19146 177 177 19147 207 206 191.8 228 228 111 Chickens, eggs, turkeys Table 15 - Annual Index Numbers of Prices Received for Michigan Fruit Crops (1), 1935-39 = 100 Year Using 193% Using 19383-147 weights weights 19311 * 109 113 1935 814 811 1936 127 127 1937 93 95 1938 122 122 1939 7h 72 191.0 102 101 191.1 113 111 19112 167 168 19113 3214 328 191114 278 272 191.5 388 373 191.6 331 322. 19h? 233 230 191.8 269 261 111 App—I313, peaches, cherries, grapes, pears, plums, strawberries. -. — ... . -—. o e e . . .. . . . t " k -4 o . .... . n , A ---.— .. e n . ’0 - o n — e - 35 Table 16 - Armual Index Numbers of Prices Received for Michigan Truck Crops (1), 1935-39 = 100 1 Us ‘ 1 ° 8:] Year :8 ZEN-113 Us‘l£§gg£g 7 193k 100 98 1935 90 89 1936 100 101 1937 111. 111. 1938 97 96 1939 99 100 19140 112 112 19111 161. 162 19112 195 193 191.3 303 w 298 191411 238 237 19115 . 283 279 19146 201 199 19147 329 323 19118 223 219 (11 Manufacture: % beans, snap beans, beets, cabbage, sweet corn, cucumbers, peas, tomatoes. (2) Market: Asparagus, snap beans, cabbage, Danish cabbage, cantaloxqre, carrots, celery (early), celery (late), cucumbers, onions, tomatoes. Table 17 - Annual Index Numbers of Prices Received for Michigan Miscellaneous Crops (1) , 1935-39 I 100 Using 193 Using 193 =- Y'm' weights weights 1931. 100 100 1935 90 100 1936 113 105 1937 99 101 1938 98 100 1939 92 914 191.0 115 1014 191.1 120 121. 19112 151 11.8 1910 191. 190 191.1. 227 222 19115 210 207 191.6 257 2511 191.7 252 250 19148 2142 239 (I) hap‘fe 8.221111% maple sugar, peppermint, spearmint, popcorn, honey, 2%” Be (D ‘5 I. 36 Corrections .- — Difficulties were encountered in the calculation of the index because monthly price data were not available for all pro- ducts included in the index. Annual price data but not monthly price data was available for soy beans and sweet clover during this period. Monthly data became available for soy beans in January 1937 and for sweet clover in August 1938. The base values of these crops were omitted for the period for which monthly price data were not available, from the base value of the groups in mich these crops had been placed. The base value of each crop was added to the base value of its respective group as price data becane available. Comparison of the revised series .- - Differences which are present in the two revised series must be attributed to differences in the weights used. The remaining factors which would effect the indexes, such as prices, the products selected and the formula, were identical in each series. The greatest divergence between the two series was found in the fruit group in the year 19115 (Table 15). The series calculated with the 19314-143 weight showed that the index of prices received for fruit in that year was 388 as compared to 373 in the series calculated using the 1938-14? weights. The cause of this difference of 15 points or 14 percent was in- vestigated. Each fruit crop was removed from the series for the year 19145, and it was found that cherries was the only crop that had arm appreciable effect on either series and it only on the s eries calcu- lated using the 19311-143 weights. When the effects of cherries was removed from the series calculated from the 19314—143 weights, the in- dex was changed iron 388 to 375. 37 The trends of the revised series were similar to the trends of the unrevised series of prices received by Michigan farmers. Splicing the Revised Index Number Series To The Unrevised Series The index number series constructed in 1931; by Ulrey adequate- ly measured the fluctuations of prices received by Michigan farmers up until 1939. The 19214-28 weights represented quite well the sales of farm products until the late thirties. The revision consequently was extended back only until 1931;. Procedure.- - In order to splice the revised and unrevised series, the price base of the original index number series was shifted from 1910-11.; to 1935-39. This step permitted the revised index number series to be compared directly with the unrevised series with a min- imum amount of effort. This was accomplished by multiplying the un- revised -c/omposite index and group indexes by the following con- m stants : 1) Prices of 20 farm products .90 2) Field crops .99 3) Feed crops 1.27 1;) Meat animals and wool .82 5) Dairy products .86 6) Poultry products ' .88 muons of Unrevised and Revised Indexes.- - The original index number series were directly compared with the two revised index number series for the eleven year period 193h-111; (Tables 18-23). This was ac- complished by shifting the price base of the original index number series _1_§/ The constants were derived by dividing 100 by the arithmetic mean of the conmosite index numbers of prices received by farmers and also by the respective group index numbers for the period 1935-39. 38 from 1910-11; to 1935-39. The comparison showed a marked uniformity between the three series of index numbers from 1931; until 1911.2. After 19h2, the two revised series showed few differences, but the unrevised series showed a mar-Iced divergence from the two revised series. 39 Table 18 - Comparison of Annual Index Number Series of Prices Re- ceived by Michigan Farmers (1),_1935-39 = 100 Unrevised Revised Ratio of Revised. Ratio of Year series, series, revised to series, revised to weights weights unrevised weights unrevised f 192h-28 193h-u3 (2) - (1) 1938-h? (h) - (1) 19 K ‘80 '83 10b 483 10h 1935 9h 9h 100 95 101 1936 108 108 100 107 99 1937 119 115 97 113 95 1938 92 9h 102 95 103 1939 87 89 102 90 103 19b0 95 98 103 97 102 19111 116 121 lot 121 1011 19112 1145 1115 100 11;? 101 19h3 182 198 110 197 108 19hh 179 189 106 189 106 (1) Unrevised series contained—2O products; revised series 59. Table 19 - Comparison of.Annua1 Index Number Series of Prices Re- ceived for Michigan Cash Field crops (1), 1935-39 8 100 (17' (2) (3) (h) (5) Unrevised Revised Ratio of Revised Ratio of Year series, series, revised to series, revised to weights weights unrevised weights unrevised l92h-28 123h-h3 (a) - (1) 1938-h? (h) - (1) 193k 98 93 95 95 177 1935 78 81; 108 80 103 1936 125 126 100 123 98 1937 137 135 99 137 100 1938 80 73 91. 78 98 1939 80 82 102 82 98 19110 101 96 95 9h 93 l9hl 113- 117 10h 116 103 19h2 150 1h6 97 lhh 96 19h3 213 196 92 192 90 19hh 209 196 9b 19h 93 U) Unrevised: Field beans, potatoes, finest, reT'I clover seem rye,afiles. Revised: Field beans, potatoes, wheat, alfalfa seed, red clover. seed, sweet clover seed, alsike seed, flax seed,_soybeans. I‘ I“ 1“ 111 Table 22 - Comparison.of Annual Index.Number Series of Prices Received for Michigan Meat Animals and'Wool (1), 1935-39 = 100 =T—TU (21 £3) a.) 5) Unrevised Revised Ra is of Revised Ra is of Year series, series, revised to series, revised to “it“? ”if; I“??? “1833” 27.978? 192 -2 193 2 +1 1 193 7 e 1 I933 59 ‘59’ 100 58 98 1935 97 96 99 96 99 1936 103 100 97 100 97 1937 111 113 102 112 101 1938 95 96 101 97 102 1939 9h 95 101 95 101 19h0 93 9b 101 93 100 191.1 119 121 102 120 101 19172 153 156 102 156 102 19h3 169 169 100 169 100 19111; 160 151 101 161 101 11) Unrevised and.revised: Hogs, beef cattle, calves, sheep, lambs, wool. Table 23 -Comparison of Annual Index Number Series of Prices Received for Michigan Poultry Products (1), 1935939 3 100 Unrevised Revised Ratio of Revised Ratio of Year series, series, revised to series, revised weights weights unrevised weights to unrevised 19211-28 19311-113 $2) -Z- :1) 1938-117 h i- 1 i§3h 77 77 100 77 1935 109 109 100 109 100 1936 103 103 100 103 100 1937 10h 102 98 102 98 1938 100 100 100 100 100 1939 86 86 100 86 100 19ho 86 87 101 87 101 19M 108 109 101 109 101 19h2 136 138 101 138 101 19h3 172 172 100 172 100 19111: 157 153 97 15h 98 Tl) Unrevised: Chickens, eggs. Revised: Chickens, eggs, turkeys. 1:2 Conclusions.-The weights and the products selected for the orig- inal index were adequate up until 1939 and possibly up until 1912. However, after 19h2 a definite weight bias is observed in the new'ins dexes which is made more noticeable when the 39 new products were added to the revised annual index. There were only'slight differences between the three series of in- dex numbers during the period 1935-39. The revised annual series of prices received for the 59 products and the unrevised series represent- ing 20 products showed no difference between original series and the re- vised series calculated from the 193hsh3 weights. The series calculated from.the 1938-h? weights showed a mean difference of only two-tenths of one percent for the same period. The group indexenumber series show'but limited discrepancies between the revised and unrevised series for come parable groups. (Table 2h.) The dairy products group and the meat Table 2h - Arithmetic Mean of the Ratio of Revised to Unrevised Index-Number Series for the Period 1935-39 Weights l93h-h3 'Weights 1938-h7 Composite prices received index 100.0% 100.2% Field crops index 100.2 100.h reed crops index 100.2 99.h Dairy products index 100.h 100.6 Meat animals and wool index 100.2 100.0 Poultry'products index 99.h 99.h animals and.woel group contained the same products in the revised and the unrevised series; all of the remaining groups in the two revised 113 series contained products which were not represented in comparable un- revised groups. It was concluded that any differences which existed between the revised and the original series during the period 1935-39 could be attributed to the efforts of weights and the effects of new commodities added to the index. World War II had little or no effect upon Michigan agriculture up to the end of 1939 and Government price controls were not introduced until after the United States entered the war. Under these conditions and due to the market uniformity that prevailed between the three ser- ies during 1935-39, it was considered desirable to select this period rather than a later period to splice the two revised series to the orig- im index. The Revised Index-Number Series Shifted to the 1910-11; Price Base Reasons.-It was necessary to shift the price base of the revised index-umber series to the 1910-11; price base in order that it be com- parable to the present price series issued by the Bureau of Agricultural Economics and to conform to some of the present methods of calculating "parity". The two revised series of index-number series were shifted to the 1910—11; base and compared with the original series from the year 1931; to date. Ww-The revised index-number series of prices received by Michigan farmers were shifted from the 1935-39 price base by multiply- ing the index numbers of the two revised series by constants. These constants were derived by finding the average of the original index- nunbers for the period 1935-39, after the series had been shifted back to the 1910-11; price base, and dividing these averages by one-hundred; hh the resulting constants were multiplied.by the corresponding revised in- dexes and group indexes in order that the price base of the two revised series could be shifted from.the 1935-39 price base to the l910-1h price base. The same constants were used for the new groups -— fruit, truck crepe, and miscellaneous products - as for the composite index of 59 products. 1) 2) 3) h) S) 6) 7) 8) 9) The following constants were derived: Index of prices received for 59 farm.products 1.11 Field crop index 1.01 Feed crop index .79 Meat animal and wool index 1.22 Dairy products index 1.16 Poultry products index 1.13 Fruit index 1.11 Truck crop index 1.11 Miscellaneous products index 1.11. The composite indexes and group indexes are shown in tables 25 to 33 and figures 1 to 8 on a 1910-1h price base. 115 Table 25 - Annual Index of Prices Received by Michigan Farmers, l910~1h ' 100 - 20 products, 59 products, 59 products, Year weights l92h-28 weights l938-h3 weights 1938-h? 193k 89 91 92 1935 lot 103 105 1936 120 119 119 1937 132 127 125 1938 102 103 105 1939 97 98 100 19h0 106 108 108 19h1 129 133 135 19h2 161 160 163 1913 202 218 217 19hh 199 208 208 19u5 211 227 228 19116 212 2118 2119 19h? 29h 289 292 19h8 306 293 296 Table 26 -.Annual Index of Prices Received for Michigan.Cash Field Crops (1), 1910-111 I 100 Unrevised series, Revised series, Revised series, Tear weights 192h-28 weights 193h-83 ‘ weights 19381t7 19311 99 9h 96 1935 79 85 81 1936 126 127 128 1937 138 136 138 1938 81 7h ' 79 1939 81 83 83 19h0 102 97 95 19m 1111 118 117 19h2 151 1117 1115 19u3 215 198 19h 19th 211 198 196 19h5 237 208 205 19h6 230 2h2 2L2 19h? 3111 313 313 191.8 286 267 ’ 267 (1) Unrevised: Field beans, potatoes, wheat, red clover seed, rye, apples. 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I I L --A ‘ _,11 1 ,.111 I ._)_._ .-11 I I I -—‘i¢~ — 1 .111. 1.. - ' 1+1“? 1 I I I I .I1 ‘ ‘ l —L~.«I- —f~—-- I-IQIi-I . . 1 .1 I _ . i325” E— .__,_._l/_ a [26? 4'fo .- )_.L 251' me 3 --- [”057 0/ PE/cués — - — W/éwrs #72 .-...._.,_ Maze. —-— ¢ » yw. .. .AH-;._ - - .._._._4.-_V.__V...-__...-;4,, Egg 5/ VEQ £83 5‘ 2157/ £264 42 52025 47/0 14 55/ ,-... ._ ............ #4 ...... . . _ O - L._..._.. “m.— ~-—- — ’- ‘ 7“ ; ....¢ ‘ ;_- i ..T--' 4. l » -4--- .’ -~_,_-_’ ~- f... __f_._.'~ . . . .--“ I ma"; ’ I 'T v a 1 . _.7, -.. s.._.,- I . , -L . a V r A , ..-. a 1' . ,4 .-L _ ‘ . w r- ' I 1--.; -....-“ . .* |.>l..‘ . . Taf- 4. _ , _ . 4 v: _ ‘.O|t>‘ll\<. W L w . . _ . .14...» m ,..- é n‘ ~ — :1 I ,._.L._. 1 pa __ 1 {.wfl 1.. 3-" .;___ I 0- V .',.,__J__ 1» rl p! ..1 LI. _ 3 Lin 4— u '9 —‘— . - .1... I n “M! -..? -....- V . , .Iolt.... ; . . _ _ 7579(7’ WE -__.. --7 ...”..v .-.- ... 7 _-._——.. M—*->~—“‘—_.- Af__ Table 27 - Annual Index of Prices Received for Michigan Feed CrOps (1), 1910—11 - 100 50 Unrevised series, Revised series, Revised series, Isar weights 192h-28 weights 193h-h3 weights 1938-h? 19311 101 98 98 1935 95 9h 93 1936 75 77 77 1937 93 96 96 1938 67 66 65 1939 65 62 63 19h0 71 70 7O 19h1 77 77 78 19h2 107 106 107 1913 132 125 127 19111; 159 152 15h 1915 153 15h 153 19h6 160 166 167 19h? 190 206 207 19118 198 196 198 (1) unrevised: Alfalfa hay (loose), corn, oats,‘barlsy. Alfalfa hay (loose), corn, oats,‘bar1ey, rye, buck- Revised: wheat. Table 28 -.Annual Index of Prices Received for Michigan Dairy Products (1), l9lO-lh I 100 Unrevised series, Revised series, Revised series, Year weights 19211-28 weights 193h-h3 weights 1938-1;? 193: 9h 96 96 1935 107 109 108 1936 122 123 122 1937 137 132 132 1938 111 110 110 1939 102 106 108 19m 115 119 119 19M 11:0 1&3 1113 19h2 162 168 168 19h3 201; 217 212 1911 211 217 218 1915 209 215 216 19116 257 266 261 19h? 283 289 287 19118 315 321 321 (l) unrevised and revised: Wholesale milk,‘butterfat. I ‘7‘“ ~- 1-. _ J -. _.;_.r.q,.—-A I ,_, I . , .. -l4__-,_.i -141 --4 _,_-..+,__, -—— ,4-.-l.._i- _ ""7’ —— L 1 | 1» s—-- I i .1 e... v . _ . - o ,1? it- . i _ . . :5! ..lo I.) , . LL 1 m w J. 3 't’ __'__M‘~ \ .v— 1——- 1. .h— t --‘v~fi ., “Wm—A , V._..s- _ ...--‘w- ‘ ‘ TI _1._.-l_._ I ... ‘ i I """?" 1“; ""T*""' 1-... .- .1-4. ' 1 1 .~. I I r -1- y \ ...—.4 . - 1..- l’ 1.1,“; 1 ..- . I .,._-_ 3... ' r ' .i 1._._ Y I A . .... -..- I I ...—Q'- ...-s e l --_.__ ..--......“ ...__..-...._ .. ...-..— -.A ‘1' ( Lu”-.-- I T \ *4-"-1"“‘“—‘ -._‘__. .. ..___..__..¢-- I . ..1 .1- o 53 Table 29 - Annual Index of Prices Received for Michigan.Meat Animals and‘Wbol (1), 1910-lh - 100 Unrevised series, Revised series, Revised series, Year weights 1921-28 weights 193h-h3 weights 1938—h? 193h 72 72 71 1935 118 117 117 1936 126 122 122 1937 137 138 137 1938 116 117 118 1939 115 116 116 1910 113 115 113 19a H6 us H6 1912 187 190 190 191.3 206 206 206 19hh 195 196 196 19115 209 211; 211. 1916 257 268 265 19h? 327 338 3h2 19h8 36h 362 365 (l) Unrevised.and revised: Hogs, beef cattle, calves, sheep, lambs, m0]. 0 Table 30 — Annual Index of Prices Received for Michigan Poultry Products (1), l9lO-lh - 100 unrevised series, Revised series, Revised series, Year weights 192h-28 weights 193h-h3 weights 1938sh7 193k 87 87 87 1935 123 123 123 1936 116 117 116 1937 118 . 115 115 1938 113 113 .113 1939 97 .97 97 19h0 97 98 98 191.1 122 123 12 3 19112 15h 156 156 19113 19h 19h 19h 19hh 177 173 17h l9h§ 207 203 203 l9h6 202 200 200 19h? 232 23h 233 19h8 262 258 258 (l) Unrevised: Chickens, eggs. Revised: Chickens, eggs, turkeys. ‘J‘T’W‘D .w i _ W _ 1*. ...—- 1 ... »- §——--$-v—- . I.. .14.! . . ilri _ .__.._.._._.__.-.._..._—o_._-—-.— “— J._-..._-l - -.‘_ ... A... fi.'~.. _ 4. AI _ 0-.— ._.. _ ...-_+.. \ I ”4““? -.- 7 ... 7:1 I 1,- l rue—Hut“ .I...Y I I _ -- ,-. _ .. ““_'""f «4—- 1.. A I _. 1-.., .r-i- ' l -J —— t v—r-n 4—- -..__ l-J__-.‘ - I ~-- -..-“ I ‘ “*‘--.» _.,_ 1 . ~~o._ +- i-_ _ .l._ . ‘ | .-__, —+-~ f-_.1.,- 1—---+»- i -. -.‘. D I .— — e-x—r »‘..-~ -w-Q—‘O‘-’—D— 1 .-.-g _._.-..- . .. 4L- xvi. - _ l . 4 1: 4‘1?!» s-l . ~ . L. I»; s .‘tintllbf 1. .4.‘Ii I»! . .---- 1 . 1-- -.-...Q - ..-. .._. ,.__ ‘ J l 4.. -1-. _ .... ...'——» . “-.-l. A‘- _ . #7-; 56 Table 31 - Annual Index of Price: Received for Kichiran Fruit Grons (l), 1910-1H : 100 cav~---.. ..-~.~.~.—-.---- — .. --.- ..—- c n.—..---.—.—.-.-.— -..—.-.- - 9-- O~O‘-- .....- C O - - -_.—-- w.- . .—-'—- ‘«--—.—" H’s- . - -‘ .—. . --. C . -‘v—Q .- -'- -—.—-_ -‘ “—- l-Tew index , 'vei"hts 1959-h7 New index, veiMhts 195hrh3 120 92 130 102 Year -.-—.—.—.—- “----- lQBM 1935 1956 1957 125 95 1L1 105 195° 155 135 lqgm Fl 80 112 125 192 112 12.) 1. 18h IQHO 19! 11 191:2 19“} 336 56k 10' u"- 506 5 C2 10‘ '5 .1127 I 11.11 256 296 255 290 19h? 192:9 -.- ‘-Hm‘.-- __ -..—“-.-.- - (1) Products: Anrles, peaches, Pherries, grapes, nears, plans, strawberries. Table 52 - Annual Index of Prices Received for Hichijan Truck Crorr (1), 1910-1H': 100 -—. . -—- c -m..-- --..--H-m -.‘U—OH — - . .-m.-.—b---'-v-. -..—.--"-- W-‘ .—M ...- -..“ .-.”-4 “w‘-- - - ' ....-- c - -.— -. x, Year weights lQBh-hB weights 1958-h7 “H“... c o»- .-.‘«m. 0*-‘-‘ 108 .... 110 99 9Q 1936 110 112 1937 128 127 107 109 123 180 215 555 262 511 221 562 ZHS 107 111 12h 130 2]}; 331 265 510 221 359 2&3 (1) {anufactureds Iina beans, snan beans, bee+° cabbace, sweet --.-——- ---—- .w - -..—*— ....--“ . --‘ v-o .. -u-Qq- 0: cern, cucvmhers, near, tonatoes. . Earket: Asmaracus, snap beans, cfibbflfie. dinfih cabba; J ...;4-.-. i ----—- _’ -.,-.‘ .- ns-.'5..‘.t.- {gin-31v nn'lar‘v J -1-) 'H‘-H - _ ___.———_r<. * 57 Table 33 - Annual Index of Prices Received for Michigan Miscel- laneous Crops (l), l9lO-lh B 100 New index, New index, Tsar weights 193h-h3 weights 1939-h? 193k 110 111 1935 108 111 1936 12h 117 1937 109 112 1938 108 111 1939 101 10h 191.0 127 115 19h1 132 138 19112 166 16h 19113 213 ‘ 211 19hh 250 2h6 19h5 231 230 19116 283 282 19h7 277 278 19h8 266 265 (1) Products: Maple syrup, maple sugar, peppermint, spearmint, pop- corn, honey, sugar'beets. Comparisons.-—The two revised annual index-number series and the unrevised group index-number series were very similar through l9h2, when they were shifted from the 1935-39 price base to the 1910-11. price base - except the fruit groups for the year 19h5. This discrepancy was attributed to cherries. There are same divergences between the original series and the‘ two revised series after l9h2. The most.marked difference in the come posits revised indexenumber series and the original index of prices re- ceived'hy'Michigan farmers occurs in 19h3. (Tables 18 to 23 and Fig- ures l and 8.) The most marked differences which occur in the groups between the original indexrnumber series and the revised series occurs in.the cash field crop group. 58 Causes of differences.-—The cause of the divergence between the original index and the two revised index-number series of prices re- ceived by Michigan farmers in 19113 was investigated. The two revised index-number series are relatively higher due to the effects of the fruit and truck crop groups which were represented only by apples in the original series. During the year l9h3 the prices received by'Michigan farmers ave eraged 2h percent higher than in 19h2. For the same period, the aver- age increase in.prices of fruit crops included in the revised index- number series (l938eh7 weights) was 178 points or 96 percent. Truck crops increased 55 percent during this period. Further evidence which confirms this conclusion was obtained when the annually'weighted.monthly index-number of the revised series, in which fruits and truck crops are not represented, was compared with the original index of prices received.by'Michigan farmers. (Table 3h.) During the period under consideration, the comparison showed that the two revised series ran consistently below the original series - 'but never more than 3 percent. Table 3b - Annually Weighted Index Numbers of the Three Series, Which Are Quoted.Monthly, 19lO-lh -1100 Unrevised.20 products Revised 26 products Revised 26 products Year weights 19211-28 weights 193h-h3 weights 1938-h? 191:1 129 130 130 19112 161 162 162 19113 202 199 197 19th 199 195 195 19115 211 206 205 191.6 21.2 zho 239 19h? 291. 288 287 l9h8 306 299 299 59 Within the major group index-umber series, the most marked dif- ferences between the original series and the revised series occurs in the cash field crop group. This difference between the original series and the revised series can be attributed to the fact that the two groups are not comparable. The revised cash field crop group differs from the original group in that alfalfa seed, sweet clover seed, alsike clover seed, flax seed and soybeans are represented and that apples and rye were removed from this group. The minor differences between the revised and original indexes for the remaining groups can be attributed to changes in weights and pro- ducts included. The differences in the dairy groups and the meat ani- mals and wool groups can only be attributed to the effects of the use of different weights in the 3 series because the same products are rep- resented in each series. 60 CHAPTER V SUMMARY AND CONCLUSIONS Summary Controversy.-The controversial issues of index-number theory are not settled, but there is agreement that the fundamental question is one of definition. (he school of thought contends that an index-num- ber series of prices should measure only "pure" price change while a second school contends that an index of prices should be a measure of historical price change which takes cognizance of the effects of quan- tities bought and sold. The divergence of opinion between these two schools is one of de- gree. There is general agreement that the fixed-weight aggregative formula is adequate only so long as the weights used are representative of the quantities of the commodities which are included. The practice of changing weights with shifts in farm sales is by all creators of de- pendable price index-number series who use the fixed weighted aggrega- tive type of formula. Fornmla.-The "ideal" formula has the desirable feature of being free from weight bias and it will also meet the requirements of both . the factor reversal test and the time reversal test. The weighted ag- gregative formulae will only meet the time reversal test. However, the degree of accuracy obtained from the fixed-weighted aggregative type of formulae is of a sufficiently high standard that it is used by the majority of state colleges and agricultural experiment stations. The fixed—weighted aggregative type of index series has been adopted in Michigan because it conforms to that type of formulae which is used by the Bureau of Agricultural Economics and the calculating 61 problems in its maintenance are relatively simple. Furthermore, Ronk of Cornell, Youngstrom of Idaho, and the Bureau of Agricultural Eco- nomics of the United States Department of.Agriculture, have found this type of formula to be comparable in accuracy to those formulae which make allowance for seasonal variation in prices and quantities marketed. The revision.-Four major changes introduced into the Michigan \ farm.price index by the two proposed revised series are: 1) Two indexenumber series were constructed - one calculated monthly'and one calculated annually. 2) Thirtyhnine new products were added to the indexes - six.to the monthly indexes and thirty-three additional to the annual indexes. I 3) The products were regrouped. h) The number of group indexes in the annual series was increased from five to eight; the new group index series created are fruit crops, truck crops, and miscellaneous crops. 5) The base periods for weighting the revised.indexes were 193h-h3 and 1938-h7, instead of 192h-28 as in the original index. 6) Two periods were used for the price base: l9lO—lh and 1935-39. The structure and grouping of the monthly index series has five groups as did the unrevised series, and products have been added.bring- ing the total up to twentybsix as compared with twenty products in the unrevised series. The method of calculating the series is the same for revised.and.unrevised series. The construction of the annual index is the same as the monthly series. However, this index:represents fifty-nine products divided among eight group index-number series. The principal reason for this regrouping of the annual index is to eliminate the effect of seasonal 62 variation of fruit and vegetable prices. Seasonal prices only are available for most of these products and during the remainder of the year they would unduly disturb the monthly price indexes if they were .represented in it. The price base period selected for the revised index was the cal- endar years 1935-39. This period was selected.because price data for the majority'of the thirty-nine commodities added to the index was not _available before l93h. A second reason for this selection of a price base is that the Bureau of Agricultural Economics uses this base to jpublish three major indexpnumber series of prices received. The re- ‘vised index was also shifted to the l9lO—lh price base in order to conform to some of the present methods of calculating "parity." The average annual sales of fiftyhnine products for two periods, l93h-h3 and 1938-h7, were selected for the weights of the two revised indoxrnumber series. The period, l93h-h3, conforms closely to the ;present'weights usedH y the Bureau of Agricultural Economics, 1935-39, and.conforms closely to the pattern of marketing Michigan agricultural products just prior to the recent war. The second.period, l938-h7, contained five and a half years which ‘were affected by war. This period.was selected.because it seems ex! tremely doubtful that the pattern of agricultural production will re- turn to that of predwar. The principal reason.for experimenting with two base ptriods was to study the effects of different weights on the price index. -The two revised price index-number series of prices received by ‘Michigan farmers show no appreciable difference in spite of the differ- ence in the periods taken for weighting the commodities. This same 63 observation also applies to the group indexes. The general trends of these series are in line with the trends of the unrevised series, which in turn behave Similarly to the index series of prices received by farmers for the entire United States. There are marked divergences between the two revised index series and the unrevised series after 19h2. This divergence of the revised annual index from the original index is accounted for primarily by the addition of fruits and truck crops. The effect of these groups is most noticeable in the year l9h3 when 0. P. A. price controls were being enforced on other farm.products more than on fruits and vegetables. .CONCLUSIONS Advantages gained by revising the original index.-The elimina- tion or the reduction of the effects of weight bias from the index of individual and groups of prices received.by Michigan farmers was the principal advantage gained by revising the original index. The physi- lcal volume of agricultural products marketed in.Michigan increased by' thirtybnine percent during the period l93h to 19h6, Appendix Table It is obvious that weights obtained from the average annual sales of the period l92h-28 no longer represents the Michigan agricultural mar- keting pattern. Only by using relatively recent weights can the ef— fects of weight bias be reduced in a.type "A" index and a periodic revision of these weights is necessary if a degree of accuracy'comr parable to that which.may be obtained by using the "Ideal" formula is to be expected. The second advantage gained.by revising the original index is that the number of products represented in the annual index was increased 6h from twenty to fifty-nine products. The fifty-nine products represents the source of about ninety-five percent of present Michigan farm income as compared with eightybeight percent of cash farm income represented by twenty products in the original index. It is desirable that as large a part of the farm income as possible be represented. The increased number of products permitted eight homogeneous groups to be formed as compared with five in the original index. This greater number of eight homogeneous groups makes it possible for specialized producers to study the prices they receive in relation to the prices received by other Specialized producers and prices received.by all Michigan farmers. The additional groups are particularly advantageous to fruit and vege- table producers because a group has been added for each of these types of crops. In the original index fruits and vegetables were only rep- resented by apples which had been placed in the cash field crop group. The effects of seasonal price variation on the index was reduced considerably by the revision. The perishable fruit and vegetable crOps which have a high seasonal price variation were placed only in the an- nual index. Crops which are seasonally produced and inexpensively stored such as corn, wheat, oats, barley, rye, field.beans and hay which have a smaller seasonal price variation than the perishable crOps constituted the monthly index-number series. In the original index, apples which have a high seasonal price variation, distorted the field crop group index particularly during the spring and early summer. Recommendations.-Two revised series were calculated. One series was calculated from weights taken from the average annual sales of Michigan farm products sold during the period 193h-h3 and the second 65 from 1938-h? sales. There is but little significant difference between the two series. The weights obtained from the average annual sales l93h-h3 conform closely'to the weighting period selected by the Bureau of Agricultural Economics. However, the Bureau prdbably'will revise the 1935-39 weights after the decennial census is taken. Michigan agricultural production undoubtedly will change,'but not to its prewar pattern. Readjustments in agriculture even though prices decline in the future, will be relatively slow. Furthermore, if the present volume of agricultural production were to change in.Michigan as :much as it did after‘world War I, it would not readjust to the l93h-h3 pattern. Another factor that should be considered before selecting one of the revised series is the population trend in the state. For the state as a whole, there was an increase of fifteen and.five-tenths percent in population'between 19h0-h7. The population in the rural areas increased from 1,801,239 in l9h0 to 2,056,008 in l9h7, or fourteen and one-tenth percent. During the same period, the urban population rose from 3,h5h,867 to h,012,992, or sixteen and two-tenths percent.l1/ .As long as a high level of employment prevails throughout the country, the non- farm and urban population will increase more rapidly than the farm pop- ulation and agriculture will be faced with a continued high effective demand. The pattern of agriculture in.Michigan consequently, would con- tinue its recent pattern. ‘}1/ J. R. Thaden, "Population Change in the Rural and Urban Areas of Michigan Since 1910," Thg:gparterly Bulletin, Michigan State Col- $232, V01. 31, No. 2, (November, l9h8) 233-2&7. 66 It is recommended consequently, that the revised series calculated from.the 1938-h? weights be adopted as the price index-number series to measure fluctuations of prices received by Michigan farmers. The weights used in this series would.be representative not only of the present agricultural marketing pattern in.Michigan,'but they also should be applicable for a considerable period in the future. 67 BIBLIOGRAPHY .Books cm, We Le and Patton, A0 C0 1925 Economic Statistics, A. W. Shaw Company, Chicago, Illinois and New York, NewfiYork. Fisher, I. 1922 The Making of Index Numbers, Houghton Mifflin Company, WWSECHusettmew York, New York. Mills, F. C. 192h Statistical Methods, Henery Holt and Company, New York, Newifbrk. ' Pearson, F. A. and Bennett, K. R. l9h2 Statistical Methods, John‘Wiley and Sons, Incorporated, New”York,lNew“Ybrk. USDA Publications U. S. Department of Agriculture l9hh Index Numbers of Prices Received by Farmers, 1910-h2, was Eton, H.732 -' U. S. Department of Agriculture 19h6 Cash Receipts From Farming, Washington, D. C. U. S. Department of Agriculture l93h-19h9 Crop Reports EngMichigan, Lansing, Michigan. State Bulletins Anderson, E. F. and weaver, F. P. 1939 Prices and Pennsylvania Agriculture, Pennsylvania State College AgriculturaIFExperiment Station, Bulletin 38h, State College, Pennsylvania. Black, J. D. and.Mudgett, B. D. 1938 Research in Agricultural Index Numbers, Advisory Com- mittee onfSociaI and Economic Research in Agriculture, Social Science Research Council, Bulletin 10, New York, New'York. Card, D. G., Brown, A. J. and Farrington, O. M. 19h1 Index Numbers of Prices and Production of Farm.Products ifi-KEhtfifikyi-UfiivEFsity’EffiKéntucky AngEuItEFaIfEEEEF: Ifient Station, Bulletin hll, Lexington, Kentucky. 68 Ebling, W. H. and Wilcox, W. H. l9hh Wisconsin Farm Prices, Production, and Income, Wisconsin State Department of Agriculture, Bullgtin 259, Madison, Wisconsin. Haag, H. M. 19h0 Missouri Farm Prices Since 1910, University of Missouri, College of Agriculture,‘Agricultural Experiment Station, Research Bulletin 312, Columbia, Missouri. Halcrow, H. G. and Diamond, J. G. 19hl Trends in Market Prices for Kontana Farm and Ranch Pro- ducts, Etntana‘State'Ctllege, AgriculturaItExperimefit_ Station, Bulletin 39h, Bozeman, Montana. Hale, R. F. 1930 Prices Paid for Maryland Farm Products 1851-1927, Uni- versity Of Maryland, Agricultural Experiment Station, Bulletin 321, College Park, Maryland. Mahan, . N. and Marsh, J. F. l9h3 Prices Received.by Alabama Farmers for Farm Products, August I909 - AuEtst I952, Alabama PolytEChnic Insti- tute, AgficulturaIWEXpefiment Station, Bulletin 259, Auburn, Alabama. Mortenson, W. P., Erdman, H. H. and Draxler, J. H. 1933 Wisconsin Farm Prices - lShl to 1933, University of TiSconsin, Agricultural EXperifient Station, Research Bulletin 119, Nedison,'fiisconsin. Peterson, A. G. 1929 Historical Study of Prices Received by Producers of Farm Products in.ttrginia, l80l:l927:_Virginia Po y- teChnic Instittte, Agricultural Experiment Station, Technical Bulletin 37, Blacksburg, Virginia. Ronk, s. E. - 1936 Prices of Farm Products in New York State, l8h1 to 1935, Cornell-University, Agrittltural’Experiment‘Statitn, Bulletin 6h3, Ithaca, New York. Stover, H. J. l93h Annual Index Numbers of Farm Prices, California, 1910- I9§§;tUniversity of Califttfiia, Agrictltural Experiment Station, Bulletin 569, Berkeley, California. Ulrey, Orion l93h Michigan Farm Prices and Costs l9lO-3h, Nichigan State CEIIEEE: Agricultural Experiment Station, Technical Bul- letin 139, East Lansing, Michigan. 69 Ulrey, Orion 1937 Farm Prices and Costs in Yichigan, Michigan State Col- lege, Igritulttral prttiment Station, Quarterly Bulle- tin, Volume 20, No. 2, November, 1937, East Lansing, Michigan. Ulrey, Orion , 19hl Prices and Costs for Michigan Farmers, Michigan State EBIIEEe, Agricultural Experifient—Station, Quarterly Bul- letin, Volume 23, No. h, May, l9hl, East Lansing, Nichigan. Wilson,'W. T. and Bryan, S. L. 1938 Index Numbers of Prices Received for Arkansas Farm Pro- ducts, 191041937,IUhiversity of Arkansas, College of Agriculture, Agricultural EXperiment Station, Bulletin 363, Fayetteville, Arkansas. Youngstrom, C. 0. 1935 Index Numbers of Idaho Farm Prices, University of Idaho, Agricultural Eifieriment Station, Bulletin 210, Moscow, Idaho. Articles Black, A. G. and Kittredge, D. C. 1928 "State Indexes of Prices of Farm Products" Journal of Farm Economics, Volume 10, July, 1928, pp. BIZ-33'7— Thaden, J. R. 19h8 "Population Change in the Rural and Urban Areas of Mich- igan Since l9h0" The Quarterly Bulletin, Michigan State College, Volume 31, November, 19L8, pp. 233-2&7. Unpublished Material Stauber, B. R. 19h9 CorreSpondence between B. R. Stauber, Head, Division of Agricultural Price Statistics, Bureau of Agricultural Economics, Washington, D. 0., and C. J. Borum, Agricul- tural Statistician, Lansing, Michigan, April 8, l9h9. APPRYDIX A Calculations: Prices received for Hichigan farm products Honthly basis for Jan. 19h8 Annual basis for 19fi8 weidhts used to compute annually weirhted prices 71 The Calculation of the Indrx of Price Received by Michiran Farmers Data. -- All statistical data were obtained from the Bureau of Agricultural Economics. All price quotations are those collected as for the 15th of each month. Formula. -- The formula used is Laspevres' -- Type A from -O- ...- Bean and Stine. Calculations. -- The products represented in the index were -...- .— arranged into homogeneous groups. 'Uithin each group, the average annual quantity of each product marketed by Michican farmers durinfi the wei"ht period (l95h-h3 or 1938-h?) was multiplied by the averace price of the product received by hichigan farmers during the calendar years 1955-39. The values of the different products which were obtaincd were sumated an the sum was called a group base value. The group base value was considered to be equal to 100. In order to find the index number of the group for a particular year, the weights of the various products included in the group were multiplied by the prices of those products which prevailed in the year being considered. The resulting values were sumated and the sum.was called the group value for the civen year. The index number of the group was then obtained by dividing the group value for the given year by the group base value. In order to find an index number of all farm prices for a given year, it was necessary to find what the percentage of each group base value was of the base value of all products. These percentages were called group weights. The group index numbers for given years were multiplied by these group weights (percentages) and the result- in: products were sumated and the index of prices received by farmers for the products was obtained. A detailed illustration is shown in Table 1, Appendix A for the monthly index which includes 26 products, and in Table 2, Appendix A for the annual index which includes 59 products. 73~ Table 1 Calculation of Yonthly Price Indexes for Five Groups and for Componite Index of 26 flichigan Farm Products for Jan. 19h8. “bizht base. 1938-h": 100 Price base, 1935-39. 100 'Weights Jan. Jan. Commodities 1958-h7 19h8 19h8 = 100 prices values ~---~—. C ash f._.... Field beans 100? bats 5,958,000 015.10 3 51,587,800 Potatoes, bu. 11,18h,COO 1.75 19,572,000 Wheat, bu. 11,8”h,OOO 2.93 5h,820,120 Alfalfa seed, bu. 65,003 25.00 1,h95,000 Red clover seed, bu. 100,000 29.00 2,900,000 Sweet clover Seed, bu. 15,000 7.00 91,000 Alsike seed, bu. 19,000 20.50 589,500 Plaxsced, bu. 55,000 6.70 568,500 Soybeans, bu. 1,1h8,000 H.05 .114QEZJIZQ Total value for Jan. 19h8 $115,875,520 Base value at 1955-59 prices 52,517,960 Jen. 19h8 index 556.5 Feed crops EITEITH’bda (loose) tons 5h?,000 025.00 8 7,981,000 Corn, bu. 5,522,000 2.56 8,50h,520 Oats, bu. 5,806,000 1.29 7,h89,7h0 Barley, bu. 1,525,000 2.15 2,8Uh,h50 Rye, bu. 553,000 2.h0 ab7,200 Buckwheat, bu. 209,000 2.15 _*lgggg§§0 Total value for Jan. l9h8 $25,507,200 Base value at 1955-59 prices 8,785,550 Jan. 19MB index 520.1 Dairy products . .--. t.—."-H‘-. -‘-.I'.- ‘ ..— Hilk sold at wholesale, cwt. 55,258,600 8h.85 8161,50h,210 Butterfat, lbs . 117 ,779,000 .93 "’5’ £72119 Total value for Jan. 19h8 $205,758,680 Base value at 1955-59 prices 71,871,078 Jan. 19MB index 286.5 Livestoch and'wool 110's, cw‘t. 2,550,770 "26.20 {‘3 66,850,17h Beef cattle, r“.“i‘. 3,176,909 20,80 66,076,520 Calves, cwt. 627,750 20.50 17,765,525 Sheen, cv’c. 1.'-7,."<‘0 9.70 1,):330,655 Laubs, cv-rt. M12950 22.70 9,559,075 Wool, lbs. ,820,000 .925 2,502,600 Total value for Jan. 1958 f"11655166,51”? Base value at 1955-59 price 53,050,062 Jan. l9h8 index 509.2 Poultry Prrducts .—J—_. Eb’feizensf‘lb‘s°."” 70,609,000 5: .20.); $0,750,015 Foss, doz. 101,!g17,000 Jugs Jv9,)_..91,!296 Turkeys, lbs. 9,6h5,000 .59 5,761,550 Total value for Jan. 19h8 $7M,012,092 Base value at 1955-59 prices 5h,551,110 Jan. 19h8 index 215.6 Groups of ¢roup weidhts at Group Group weiahts Commodities 1955-59 prices indexes x group indexes Cash field crops 16.22 556.5 57.79 Feed crops L.59 520.1 1H.O5 Dairv products 55.85 286.5 102.58 Livestock ”'wool 26.hh 509.2 81.75 Poultry products 17.12 215.6 6.91 105.36 -....- Conp051te index, Jan. 19L8 295.08 Table 2 Calculation of Annual Price Index for Groups and for Composite Index of 59 Hiohioan Farm Products for 19h8 weight base, 195P-h7I 100 Price base, 1955-598 100 Commodities included in Annual index ‘Yeiehts 19MB prices 1928 values Triit crops KSETEsj'buT 6,902,000 1.85 312,762,700 Peaches, bu. 5,9h9,000 1.90 7,505,100 Cherries, tons h2,979 18h.00 7,900,156 Grapes, tons 5h,86h 105.00 5,660,720 Pears, bu. e56,000 2.20 1,885,200 Plurts, toz-zs M259 95.00 13,017,605 Strawberries, crates 762,000 8.55 6,515,100 Total va1"e for l9h8 h0,6h5,561 Base value at 1955-59 prices 15,575,150 19.",8 index 261.0 True“ crops for ranufao+ur§ Lina beans, tons , 1,200 3 12h.70 3 1h0,6h0 Snap beans, tons 8,270 110.30 912,181 Beets, tons 6,880 21.00 1hh,h80 Cabbare, tons 7,180 1he90 106,982 Sweet corn, tons ',550 22.00 100,100 Cucumbers, bu. 1,7ue,000 1.65 2,88h,200 Peas, tons 8,h28 76.90 6b7,270 Tomatoes, tons 57,5h0 25.10 957,25h Truck crops nor market 135a5e59;;2abbcs”“‘ 851,003 2.02 1,719,020 Snap beans, bu. h6h,000 2.65 1,229,600 Cabbade, tons 5h,000. 52.00 1,728,000 Danish cabhafc, tors 22,000 51.00 682,000 Cantaloune, 70} crates 672,000 5.h 2,2QL,QOO Carrots, bu. 1f§5.000 .70 1,276,100 Celery, early, crates 2,055,000 1.50 2,661,100 Celery, late, crates 3,667,000 1.50 5,500,500 Cucumbers, bu. 220,000 2.20 h8h,000 onions, 5Q? sects 6,877,000 1.50 8,9h0,100 Tomatoes, bu. 2,015,000 2.50 5,057,500 Total value for 19MB 57,h2h,807 Base value at 1955-59 prices 17,072,876 19h8 index 219.2 76 lfiscellaneous products ---_..._—-._._ fable svrup, 7013. 96,500 5.M0 r21,100 Naple suear 8,200 .7M 6,060 Peppermint, lbs. 505,000 6.85 2,705,750 Spearmint, lbs. 79,700 L.60 566,620 Popcorn, cwt. 52,65h h.75 155,012 honey 8,605,000 .15 1,290,55 Sufar beets, tons 729,000 15.50 _19,665,000 Total value for 19l8 15,710,000 Pase value at 1955-59 prices 6,57h,7h0 l9fl8 irdcx 252.9 The annual indexes nor 19h8 for the other five proups of prod- ucts are calculated in the same manner as for the routhly indexes in Table 1. The right wroups are conbined into the composite index for 59 commodities as Pollows: - --“ua—QW-— -"fl-chfi-w—* —-—.—- -—.-. Groups of Group wei"ht at Group indexes “roup weiahts conroditics 1955-59 price for 1958 x croup index Cash field crors 15.56 26h.5 55.8w Feed crops 5.66 251.1 0.19 Fairy products 29.97 276.8 82.98 heat animals 22.12 299.5 66.21 Poultry products 1h.52 228.0 52.65 Paait crops 6.50 261.0 16.97 Truck crops 7.12 219.2 15.61 Hiscellaneors preducts 2.7% 258.9 100700 Composite index for 19h8 266.0 77 ‘Yeiphts TTted to Compute Annually'fieighted Prices Sdrran of data. -- Data was obtained from the published and ......“ o ...-.....- unpub ished monthly marketin; estinates of the Bureau of Afri- crltural toononics. “Eric-fitslilo-ruan‘znfiprizes. -- The weighted annual prices as. calculated by the Pureau were used in calculating the annual indexes for livestocfi and products. The seasonal pricesnrepared by the Bureau were also used for fruit, crops, truck crops and miscellaneous crops. The assumption is that these crops were entirel‘r marketed by farrers by the cnd of the calendar year, which is not entirely correct. The “ureau crop year annual averapes for the field and feed crops were not used. Instead, annual averafes for the calendar years were calculated frcr monthly ma Petinjs. The monthly narketinjs used were averafes for the period 195h-h7, where data were available. 0. Table 5 lists the weiéhts use to calculate the weijhted annual prices of the feed and field crops. Much of the data were derived from unpublished material now in possession of the Bureau. 78 00H m 00H m.m 00H m ocH 4 ooH m.oa ooH ma ooH e.m 00H m 00H m.cp 00H :H ooH m.m 00H 2.: «OH o.e ooH m.oH coH NH .ooc III! mH a.: Hm mH c.mH . "l- -t"- I .sbz ,I'I' .. I -..--.ll'lll-|" ‘l'l --II-"IO I I‘lll" 'I'....|'- '|'I- I. D 'II-‘ I mcopc wHeHh ecu cor fL. 0H Hm m m m c.mfi m.:m >.mm e.m mm o H m e eH om mm o H o.rH :.aH :.: mo. m.H om EH m m m m.e ;.c e.mH H.mm m.g mH m N o m :.;m v.9 n.m >.m e.m cu m m m e e.e e.:H mesm H.efl m.H e.m e.oH c.9m o.HH m.m H.e e.a o.oH w.e m.e :.o m.@ 0.0 >.w m.» r -4 m m m .vcc .pmom .574 bath ocsw hm ..p o.m NH Huaa< HH I Ini'n’! - ' .II'. .II III'. ’ -l. ‘o'l..-""‘|:'lt .ppa '11-! ...-O - -‘l’l‘l, - .0 I e @ m.H m.m im 5 u m m.» w.m m m e.m H.© HH NH m.m H.@ a w m.m m.m w.m o.w J.w ..w H.0 L.C NH HH .pmp .Lae i -I-.. '|' ..---‘.'llll. 'i .Hmbec mam ceowxefim mceem tow eccp waflmfia @ecm pebeflc Peeim mgem omHaMfid pamxw weepapek pwoxtxorm eta Lofipem upwo Como. r.\ :«a emfiaefia ace moowag eopmmflea maaesmce ouspfioe op new: megaflp? m efixae A??? 'D I}: T3 Tnder’. T’unbers of Price: f ITic...i"an ”Farr-- Products 1?;n'n-LQ, '53. r} BO 5mm cam oqm 4mm mama «am new mom Ham 0mm mew mew 0mm mam saw :am «am mam mama Hem mam mew mew mam mom mmm 0:“ new mmm mmm 0mm «mm head Nam gem New pmm mmm omm emu sad mma mma ema mma and mama ema Hma mma ema med aaa Had oma and and pea owa ema mama pea ema med «ma mad wad Had Ned mad mad owa med mad qama mad oma ema and mod and mea mad owa owa aha JNH mod mead pea 40H moa mma mma mad maa and flea 04H cad flea Nea mama mad Odd and and «ma HNH :NH :HH oaa moa moa moa moa Head mm moa eoa Hoa am am am mm :m mm om mm mm onma om pm Hoa mm mm am om mm mm mm mm om Hm mmma mm mm mm mm gm Hm em mm :m mm ooa ooa Noa mmma mad «Ha mHH mad eaa add add pad oNH sea ewe mma :md amma eon «NH mma wad moa mad aoa am em pm pm ooa «ca emaa em 40a woa Hoa mm 4m 0m Hm mm mm pm ooa am mmma me mm am an mm mm me we Np ma e» me oh :mmfl owmnm>< .oem .boz .poo .emmm .mdd .hdsw mash has. .nad .szw .nmm .amw “wow empamama 02.5.33 .. 3:30; 03 u mmnmmfi «359$ sum 53:32 8 Mo 30am ...a 235% ~33 5 mafia Table 5. Annual Index of Michigan Fruit Crops, Truck Crops, Miscellaneous Crops, and Composite Index of 59 Products, l93h~h8. 1935-39 '100. Wéights 1938-h? = 100. 7 19 7 59 Year Fruit Truck Misc. Products Crops Crops Crops 193k 113 98 100 83 1935 St 89 100 95 1936 127 101 105 107 1937 95 11h 101 113 1938 122 96 100 95 1939 72 100 9h 90 19uo 101 112 ion 97 19M 111 162 121; 121 19h2 168 193 1&8 1h7 l9h3 328 298 190 197 19hh 272 237 222 189 l9h5 373 279 207 205 19h6 322 199 25h 22h 19h? 230 323 250 263 19h8 261 219 239 266 82 OON OON mON NON OOOH OON HON HON mNN NON NON OOO OOO NOO HNO HHO OHO OmO OOOH OHO OOO OOO HOO OHO OHO OOO OOO NOO NHO OOO NON HON NOOH OON HON NON NON OON OHN ONN NHN NHN OHN mON OON OOH OOOH OON OOH NOH NOH _ mON ONN mNN HNN OHN NHN OON mON OON mOOH OOH OOH OOH HON . OON NON OOH mOH HOH HOH OOH OOH NOH OOOH NOH mOH OOH NOH OOH OON OON NHN NHN OOH OOOH ONH OOH OOOH OOH NmH OOH NOH OOH OOH OOH OOH OOH OOH OOH OOH HOH NOOH OHH OOH NOH ONH ONH ONH ONH OHH HHH OOH OO NO HO HOOH OO HO OO OO OO OO OOH OOH OOH NOH OOH OOH HOH OOOH NO OO NO NO OO NN NN NN ON HN OO HN OO OOOH ON OO OO OO OO NN OO OO OO OO OO NO OO OOOH NOH OO OO OOH OOH ONH HOH OOH mNH OOH OOH HOH ONH NOOH ONH HOH NmH OOH OOH OOH OOH OOH NO OO OO OO HO OOOH OO ON NN OO ON OO HO ON OO OO OO mO OO mOOH mO OO OO . HO OOH HOH OO NO NO. OO mO OO OO OOOH mmmnm>¢ .omn .>oz .poo .paom .ms< OHOO mash he: .umd .HOEV .nmm .sww Meow OOOOOHOO OOH-NOIOOOH OOOOHm: OOHuOOumOOH OOOHOOHO OH macho OHOHO OOOO O you Osmoseoum op OHOO OOOHHO mo muonasz xOOOH .O «Hana 83 OOH OOH OOH OON OOOH HON HNN OON OHN NNN ONN OON NNN NON OON OON OON ONO OOOH NON OOO OON ON OON ONN OON NON NON OON OON OON ONN NOOH HHN ONN NNN OON ONN OHN ONN OON NON OOH HOH HOH NOH OOOH OOH OOH NOH HOH ONH ONH OOH OOH NOH NON OHN OHN HON OOOH OOH OOH OOH OOH OOH ONH NNH OOH HHN OON OON HON OOH OOOH HOH HOH OOH ONH ONH NOH NOH OOH HOH OOH OOH OOH NOH OOOH OOH ONH HNH OHH OHH OHH NHH NOH OOH OOH HOH OOH OOH NOOH OO ONH OHH OOH NOH OO OO OO HO NO OO OO OO HOOH OO OO OO NO ON ON OO OO OO NO NO OO NO OOOH OO OO OO OO OO HN ON OO HO NN ON NN ON OOOH NO ON ON NN ON ON OO OO . OO OO OO OO OO OOOH NNH OO NO OOH HHH OHH OOH NOH OOH OOH OOH OOH OOH NOOH OO OOH HOH HOH HOH NNH OO OO ON ON ON NN ON OOOH OHH ON ON OO OO OO OO OOH OOH OOH OOH OOH OOH OOOH ONH NOH HOH OOH NOH OOH ONH OHH NOH OOH OO OO OO OOOH ommne>< .omn .>oz .poo .pmmm .ms< OHOO aqua has .mmd .Hma .pmm .cmw Meow OOOOOOOOOO OOH-NOIOOOH OOOOHma OOH-OOIOOOH OOOHOOHO OH OOOMO OOOO O HO“ mnmoseoam Op OHOO OOOHOO mo mnonesz OOOOH .N OHOON 8h ONN OON OON .HON OOOH NNN HON ONN ONN OON OON OON OON OON OON NNN HON OON OOOH OON OON NNN HON OON OON ONN NNN ONN OON OON NON NNN NOOH ONN OON OON ONN HON OON ONN OOH OOH OOH OOH OOH OOH OOOH OOH OOH OOH OOH OOH HOH ONH ONH OOH OOH OOH OOH OOH OOOH OOH OOH OOH OOH OOH OOH OOH OOH OOH OOH OOH NOH NOH OOOH OOH NOH NOH NOH OOH OOH NNH NNH ONH HOH OOH OOH ONH OOOH OOH NOH OOH OOH OOH HOH OOH OOH OOH OOH OOH OOH OOH NOOH ONH OOH OOH HOH OOH NHH NNH ONH OHH OHH NHH NHH NHH HOOH OOH NHH OHH OOH NOH OOH NO OO NO OOH OOH OOH OOH OOOH OO OOH NOH OOH OO OO OO OO NO OO OO OO NO OOOH OO OOH OO OO HO HO OO OO OO OOH NOH OOH OHH OOOH OHH ONH NNH HNH ,OHH OHH OOH OOH OHH OHH OHH OHH NHH NOOH OOH OHH OHH OHH HO NHH OOH OO OO OOH ONOH NHH HHH OOOH OO OOH HOH NO HO OO OO HO OO OOH OO OOH NO OOOH OO OO OO OO OO OO NO .ON ON ON HO NN HN OOOH omwhgd .03 :52 .900 Show .93 .22. 0:3. OOOH ..Hmd .HOOH .ncm 52. 9.3% OOOOOHoO OOHnNOnOOOH OOOOHOO OOH-OOuOOOH OOOHOOHO_:H apogeonm_OnHan N you ngooseonm op Oaam OOOHHO NO Ouanasz ”OOOH .O OHOOO 85 ONN OON OON ONN OOOH OOON ONN NON NOO ONO OOO OOO ONO OON NON OON ONN OOO OOOH OON HON OON OON OOO OON NON ONN OON ONN OON OON OON NOOH NHN OON OON NON OON OON HON OOH OOH OOH OOH NNH ONH OOOH ONH NNH ONH OOH ONH HOH OOH HOH OOH HOH ONH HNH OOH OOOH HOH OOH OOH NOH HOH OOH OOH NOH OOH OOH OOH OOH HOH OOOH OOH OOH NOH OOH ONH ONH NNH NNH ONH ONH ONH ONH HNH OOOH OOH NOH OOH OOH OOH NOH OOH OOH OOH NOH OOH OOH NOH NOOH ONH OOH ONH ONH OOH ONH ONH OHH OHH OHH OOH OOH NOH HOOH OO OO OO NO OO NO OO OO OO OO OO OO HO OOOH OO OO OO OO OOH HO OO HO OO OO OOH OO NO OOOH NO OO OO OO OOH OO OOH OOH OO NO HOH OO NO OOOH NHH OO OOH NHH ONH HOH HNH OHH OHH NHH OHH OOH HHH NOOH OOH OOH OOH OOH OOH OOH OOH OOH NOH OOH OOH NOH OOH OOOH OO OOH NOH OOH HHH OOH OOH HOH OOH OO NO OO NN OOOH OO HO OO OO NO OO OO OO OO OO OO OO NO OOOH mmmnmbd .03 .>02 .900 23% .34 .32. 036 he: 35¢. ..HOE .nom .HHOH. HOOH OOOOOHOO OOH-NOuOOOH «OOOH»: OOH-OOIOOOH OOOHOOHO_OH OOOOOOOO Hoe; OOO OHOEHOO OOOO O you unmoseonm op eHum OOOHHO mo muopasz ”OOOH .O OHOOO 86 OON NON HON ONN OOOH ONN OON HON OON NON HON ONN HHN OON NHN NHN HON OHN OOOH OON OON OON OON OON HNN NON NOH OOH HOH OOH ONH HOH NOOH NNH OON NNN OON OON OOH ONH NOH NOH OOH HOH NOH OOH OOOH OOH OOH HON OOH OOH OOH OOH ONH NOH OOH OOH OOH ONH OOOH OOH HOH OOH NNH HOH NOH HOH OOH OOH NOH OOH OOH HOH OOOH NNH NON OHN HON OOH OOH ONH OOH OOH OOH HOH OOH OOH OOOH OOH HNH NNH OOH OOH OOH HOH ONH ONH ONH ONH ONH OOH NOOH OOH OOH OOH OOH HOH HNH ONH NOH OO NO OO OO OO HOOH NO HHH OHH NOH NO OO OO NN ON OO ON HO OO OOOH OO NO OHH OOH NO OO OO ON HO OO NO OO OO OOOH OOH ONH OOH ONH OHH NOH NO OO OO OO N NO OHH OOOH NOH NNH OOH ONH OHH NOH NO NO HO HOH NO OO OOH NOOH OOH NNH OOH OHH OOH OOH OOH OO OO OO NOH . OHH OOH OOOH OOH NOH OOH ONH OHH OOH OO NO OOH O OO NO OHH OOH OOOH NN OOH OHH OO OO ON NO HO OO OO NN ON ON OOOH $98.5 . own .>oz .900 Show .wHé OHH. 056 has 3&4 ..32 .93 .92. new» OOOOOHONO OOHuNOuOOOH BOON; OOHuOOnOOOH OOOHOOHO_:H OOOOOOOO OOOHOOO O you utmoseonm 0O OHOO OOOHOO no Ononaaz xOOOH .OH OHOOO AI’Y’EITTT’ZX C Index Numbers of Price: of Zfiohican “arm Products, lQBO’L-JQ 1910-11.; . 100 l’feicjhts FEB-h? .-_ loo Or. Oh. HON OON OON ONN OOOH OON OON OON OON OOO OHO NHO OOO .OOO HOO HOO NCO ONO OOOH NON NNO .OHO HHO NOO OcN HON HNN HNN ONN OON ONN ONN OOOH OON OON On OON OON OON NON OHN OON OON OON HON OON OOOH OON OHN OON OON NON OHN OHN OON OON OON OON OON OON OOOH OOH OON OON OON NcH OOH OOH OOH OOH OOH OOH NOH NOH OOOH NOH OON ucN NON OON NON NOH NOH OOH OOH uOH HOH OOH OOOH NOH OOH ONH ONH OOH OOH NOH OOH OOH OOH OOH OOH OOH NOOH OOH OOH HOH OOH OOH OOH OOH ONH HNH ONH NHH NHH OHH HOOH OOH OHH NHH HHH NOH OOH OOH OOH OOH OOH OOH OOH OOH oOOH OO NOH HHH OOH OOH OO OO HO Oo Oo OO OO OOH OOOH NOH OOH OOH OOH OOH OOH NOH NOH_ OOH OOH OHH OHH OHH OOOH NNH ONH ONH NNH ONH OOH OOH ONH NOH OOH OOH OOH OOH NOOH NHH OO OOH ONH ONH OOH ONH OOH OOH NOH NOH NHH NHH OOOH OOH .OHH NHH HHH OOH OOH Oo OOH OOH OOH NOH OHH OOH HOOOH NO OO OO OO OO HO Oc ON ON OO OO OO NN OOOH OMMMMWMM .000 .boz .poo .pocm .m5¢ Lana ensw he: HONC< .hdfi .poh .now Meow 1‘.» III. I‘-¢l-‘l‘lil§'| I ' ‘Illl."1l OOH - NO-OOOH O+OLHOO. OOH . OHuOHOH Oposoopm EAOh mm CO:O£0O: mo OOOONA mo mpmfiEbz KoOsH HH oHfiae 9? OON NON C; ONN OHN OHN OOH :OH OOH OOH OOH ONH OHH OOH NO ‘1’; in -‘v 1" ". II..- -....- ' " o I 'il‘l‘u‘}.- OposOogO OO OON ONN NcN OON OON HHN :OH OOH OHH :OH HHH NHH NHH HHH HHH mpopn wSOQCOHHOOwwu b \ OON OON OOOH OOO OON NOOH HNN NOO. OOOH OHO 30: OOOH mflw mom JJQH HOO :OO OOOH .OHN OOH NOOH OOH ONH HOOH :NH NHH O:OH HHH OO OOOH NOH OOH OOH NNH OOH NOOH NHH OOH OOOH OO OO OOOH OOH ONH :OoH upopc Moshe 0H Onopc pwsph O haow ’11:. lil!'.u .... OOH u OOaOOOH wad mpohr wsocQOHHoOO H-, 4 OlF "-.I" ' -III OOH u NquOOOH pg Hp? . @31:mafl .O90560hm.mm mo chrh opfiwomfico .mcopo gouge .wcopc pOOLb :OzOAOOA mo HQOQH sznn¢ NH mHnwe OON OON NON OON ONO :HO NNO OOO OHO NHO OON :ON NHN NON NON HON OHN OHN NON OON OOH NOH OOH OOH OON NOH NNH NOH OOH HJH .ggH OOH OOH OO OO NO OOH OOH :OH NOH NN ON NN ON om :0 mo N0 OOH OcH OOH ONH OO :O OO NO OO NO OO NO OO :OO OOH OO wWMOO «MOO .OOO .OOO NON OHN OON NNN OON OON OOO HHO OHO OH OO NOO :sO OHO HNO OOO NOO OON NON OON OON NON NON ONN ONN .OHN :HN OON HON OOH :OH NON ONN NNN ONN OHN OOH HON HON OON OON OON NOH NO OOH OOH NOH OOH OOH OON OHN cON :HN OHN OOH OOH HOH OOH N:H O:H OOH OOH O:H NHH HOH OOH ONH NNH .aNH OOH OHH NHH OO NO :O OO OO OO HOH HOH OOH OO NO OO OO OO ON ON ON OO ON NO uO NO OO ON NO Hc OO OOH OO OO HOH NOH OOH OOH OOH ONH ONH OOH OOH OOH OOH OOH HOH OOH O HO Cr mm mm om wm ma mb mm OO OO :O NO OHH NOH HO OO OO ogwahobaq. 0 00C 1 owuow... o POO O atom. oAmHH< OHHSN‘. 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OQOOOHOO OOH u NO-OOOH OOOOHOOF COLOLOHL :fi mpopc wamflb xmwc m how whoos©0hm op Ofiam mwowpm mo wgoafira I‘.'"‘§ ' -t'- 'u OOH u :HuoHOH 0:0H QOOmH fisz Q:OH msmH +30% MJSH NOOH HJOH ozaH OOOH OOOH NmoH OOOH OOOH :moH pwww OOOOH OH OHOOO O UH mifi m” “H NQH C." “CH 0 OOH ONH HOH ONH ONH ONH OOH OHN ONN ONN ONN NHN OON OgOH NON N;N ONN OON ONN OHN NHN NON HOH :OH :OH NOH NNH NOOH NOH NNH OOH OCH NNH ONH NNH OOH OOH OOH HOH HOH OOH OOOH OUH O;H OgH O:H NOH OOH OOH OOH OOH OOH OOH OOH OOH OOOH :OH OOH uur NOH O:H HOH OOH OOH NOH OOH OOH OOH NOH 4OOH ONH HUH O .O H.:H OOOH ONH :NH ONH OHH OHH :: HHH :OH in NOH Oc OO OO :O HO NO :OH OHH OHH OHH OHH NOH NOOH mt OOH 00 mm mm :r mu 0v Nb mu Ob 0h HO H:&H ON NO NO OO NO NO OO HN ON NN NN ON ON o:OH OO HN O «O OO Om OO NO :O HO NO HO OO OOOH OO OO HO HO Om OO ON NO ON ON ON ON ON OOOH 00 mu N or mm Om mOH OHH NNH mHH :HH mHH mHH NmOH NN NOH OOH OOH OcH OOH ON OO OO OO OO HO NO OOOH OO Om OO OO NO OO ON NOH :HH OHH HNH ONH ONH OOOH OO ONH NNH OOH NOH NNH OOH OO OO HO NN ON HN OOOH 11.0.8833. JOMMWIMVS“. n um.o.©.l ...pflom ..HMEHH LEO. -..os. .w iHMH..- mwwww. - ......HuOW.‘ ...m'arm. ....mwh. wwmw. OOOOOHOO OOH u NzuOOOH OOOOHOO. OOH u :H-OHOH nmtflrcwu cw mgopr week w you mtcosvcym op Ofiwm moowpm mo ONOLESZ menH :H OHQOB ON ONN OON OOO OOOH HNO ONO NNO NNO NOO NOO ONO HHO HHO NHO OOO ONO NOO (OOH OOO ONO OHO KOO NOO OcN OON CON OON ONN OON NON OHO NOOH HON OON ONO ONO OOO NON OON :NN OHN OHN :NN :cN ONN OOOH OHN ONN ONN OHN NHN OHN OON OON OON NHN ONN ONN OON OOOH nPN ONN ONN ONN OHN OHN OON OON NHN OHN. ONN ONN ONN .HOOH NHN ONN ONN ONN OHN OON OON OON OON OHN NHN NHN NOH OOOH OOH :cH HOH :OH :NH :OH NOH OOH OOH HOH NOH OOH OOH NOOH OOH OO. OOH :OH OOH OOH N;F OOH NOH HOH OOH OOH OOH HOOH OHH OOH NOH ONH OHH OHH OHH OOH OHH OHH OHH ONH ONH OsOH OOH ONH :NH HNH :HH NOH OO OO OO OO OOH HHH OHH OOOH OHH OHH :HH HHH OOH OOH OOH NOH OOH OHH :NH ONH OOH OOOH NOH O:H NOH OzH OOH ONH NNH NNH ONH NOH OOH NOH OOH NOOH NNH OOH OOH NOH OOH OOH NNH OOH OHH OHH NHH OOH ONH OOOH OOH ONH NHH OHH OOH NOH OO 4O NOH OHH :HH OHH OHH ONOH OO HHH OHH NOH NOH OOH OO OO OO NO OO OO NO :OOH 'I'-.- .I I. .‘V'.’ ' I Dyiv I -l’l‘u- yin! .I.“ "II'- 'II '.ll.llr.-.-'IIII ozmpohO .ccc .boa .pco .ppmm .O24 hflzw orfiw :cL prcd .LO: .pmh .ch pamw Oopsafiofi .-. -|"ll -i‘l - 01'} ..."l I "-'i'.i OOH - NO-OOOH OOOOHOO OOH - :HuoHOH aduflnoOO CO OpOsOogm OOOOC m hoe mpqoswopm op OOOA Oncfihm mo whoprzz OOOHH ma oflpde :OO NOO ONO OOO OOOH OOO OOO Ohm OOO OOO O): OOO O O OOO OOO OOO ONO OOO OO:H NOO OOO 0,0 OOO OOO OOO OOO OOO OOO OOO OOO ONN OOO OOOH OON NHO LOO :HO .OON OOO ON OON ONN OON ONN OHN OON OOOH OHN OON OON OON NHN HNN ONN OO ONN HNN OHN O: OON OOOH OOH OOH OOH NOH OOH :OH OOH OON OON OON OO OON Oi :OOH \-N OOH NOH OON HHN HHN OON OHN OHN OHN O N OHN OON OOOH g ;4 OOH OOH OON OOH OON :OH Om OOH OOH NOH OOH OOH NOOH w:H moa a . OOH OOH OOH OOH OOH OOH OOH OmH «OH HOH OOOH OHH OHH OHH ONH OHH OHH OHH OHH OOH OOH OHH HHH OOO; OHH OOH ONH cNH HH- OHH HHH OHH OHH NOH HNH OHH cOcH OHH OHH ONH OHH ONH ONH NOH NNH OHH OHH ON OHH crH OOOH OOH OHH NNH OOH OOH OOH OOH OOH OOH OOH OOH OOH OOH OOOH NNH ONH NNH ONH OOH NOH ONH OOH OOH ON ONH HOH ONH OOOH OHH ONH ONH NOH OOH NOH NNH ONH NNH ONH OHH :OH ac OOOH HO OO Np OO NO N HO OO OO OO NO NO OO :OOH .‘ Cm O U '— [r Hr" wucac:< .OOC .bcn .woc .pncm .u:< rain main {Oh Hwnn< .ch .Lcn .Ltw pch Ocpquoh. :HuoHO .OOOHOOOO OH OOH u OquOOOH mpOzOOOV OOH u mvosmcpm Hofifl cad OHOFHpq pmcz @ pom OLQOSOrpQ o# wflxm wooapm mo upc3fi7: nmvsH «H CHLOE LG LPN ufm mmm rpm mum oom emu firm mom ;mm [mm swfi chm Lflm :mH ram PM“ mmfl mad wcfi am me me no mo cmfl mHH mmfi usfl rfifi mmfi HUH mHH :gfl umfl mmfi c;fi HUH we NNH omH muwmwww:teqmnmw-uypwm workuflmm l..|l’l'l'- Iu O I n mam NNN CQN PWN “VwH NNN 06H @mH Hmfi QHH Osfi Hgfi mmfi N;H HHH mam «Fm Hmm mew mew mam ONH mgfl cHH cHH mmfl omfi mmfi HNH ca 1"-1"‘- .poo o#fi0m ooH "5;:amofl mynafio? :w wpczccpm hppflzom m Lem mnccrnoam o# dem wcowhg mum omw mom 0mm nwfi oflm omfi umfi pm mew Uflr Hmfi UHH mHH mm .ur¢ "i--:00 O .‘Ii!’!.l'l.- ppm mam How mwm HrH NVH Cwfi \w 00 :C ofiH OHH mHH NOH or Lrflghv !!.'.,0 Fill!!- III..I.,"- I . my? pk. (mm «mm flwm OHN mp: NEE «c cam ova wmfi C C H. AVG H me CMH HHH HHH yc mm CL NC PCH PCH rC mOH fiflfi HHH OHH mHH 00 mt \th h mmm OJN QHN 69H mmH mUH Qua Cme CHH 00 mo NOH dHH DCH NHH up .‘I‘-IID! H 15. 1 Oil: 15"-}! ‘61-.||I1-"'Il d ' \mm ram o:m rum .:HN mac HNH 00H :CH C(r wcfl ocfi mCH ONH (ma m;fl om uc om woe $0 NO :OH . sch OHH ULH mHH :wfl sea cmfi HQ we Ilt’,l.ll..I-I Sour; mgofl w;ofl m;afi w;cm :JCH mgofi NLOH H40H OJC.“ Omofi mmofi nmmfl mmofl umofi :moH :1 ‘II'".'. - 'l ludam .r.../ 1 ‘ I!‘:Ifi‘l cmH PH candy APPTVDIX D Calculations: Index of PFysionl Volvme of Farm Products Thrfrted ifi Kichi"an. Index of thsical Volume of T"arc-1 Products Karfieted in fiichican- An index of the ohysical volume of far1 pro‘ucts merteted in 7?. alchican for the period lQBL to 73K? was constructed in order to study the sales of individual and “rover of farm products. “rta -- The data were obtained from so rces oublisbed b‘r the *0-- Burcau of 7~ricultural ficononics. ?ormula -- The formula used was Iasnevres'. The variable van in terms of quantities marketed COCA year and the variable was the averaée annual orice of tie ifidividual oroducts included in the irde“ for the fears 192L-26. In cases where crice data tor S'ne hrodncts res not available d ring this period, the annral averare price for the "reatest nurber of years between 192k and 1€%B was used. Eyquilatlog -- The same procedure was followed in the calculation of the marketing ithT as that of the price i“dc?. 1 ... . . ! “o“evor, the arerace farm brices received ry nroducers, 192:r}6 1. .V an” cuantities ficrteted each vear were varied. The base values or Pc Q0 was obtained b? multiplying the av.rare ‘— '. 0' ‘~ 7" ’~ V ‘ au““al hazletirrs of the :teS lQ;.-l3 3f annual averafie farm prices for the years 192H-h6. In order to find the total ixde: the frouo indexes :ere rot weighted; the total ind x is corstr- noted in the rare banner as the fro*“ irfex numbers. A deteiled illustration is "ho“n in Table, i “eufiix A. Table 12 11'"3F I'” TT“"Y Index on 9030: of farm eroducts iror Kichica“ “"rms on a calrrdar .0 - ”-0 -—.. ”on“ " ris. Price was beld constant (“"rr*“c rricr: was taken ron . r- 122” to L :0 on all oroducts .rhore rlat-a. wflt available) and multi- o q -3 -. (4-7. '7 “lied each j'r‘ar's rrtar‘wti r, -.’ ,. u 190. . O—O-a-Qr--- - .—.—. &---.—-W- - o . - .u. 0—- W Avera e Prices 1o2V-L6 1oz¥ -0 ...-..---fl— ‘-H----.—---—v-v---- -------—‘o-s -.e-- ---‘-.~_H------.-_—.-g .,.‘ “nah field “an“. f?}figi ifi§;;; Ida. bcfs h.'“(x quantit" lj,VOO Potatoes, tu. .bé forketed ll,llh Wheat, bu. 1.00 in 195%) 6,LO7 Alfalfi nerd, bu. 18.?5 575 Red clover sci”, tu. 12.95 259 Sweet clover seed, bu. )3.2) 91 “ a c / ”l “c seer, ou. 12.07 100 Tlr;recd, bu. 2.07 168 ~,"boanc, bu. 1.60 F. q ”0 f8 If 111p TO .‘v—l - ‘ 7 DU 2+C— a_..“ ("*xp'l "I"; - (’lm,000) , PC Ind.cx ' ?ncd Croce Alfalfa hat (loose) tons 11.17 5,250 0 ts, bu. .LS are arl c7, bu. .7H BMO r... a '7 0 e, n. .,7 5.0 “ucfi‘boct, b1. .76 “Q XVI-1" Hp {jfi'H ...l 7‘ _ 0 nt- Tfi1‘1u7‘ L = ~-/ L/ - ,,O{;,OOO) «:* Tudex 67 “air.' “reruct Till‘sold etvf‘olesale cvt. 2.17 Ll,°50 Butterfat, lbs. .MO 2“,?05 Value (1935-55 . R0,oéo,ooo) E???flf? Index 22 ‘%at oninals Poof cattle, calves 9.51 26,016 Sheeo, larbs 7.L2 5,77N ‘.Tool, lbs. .3 2,7yg mm (19 =3 L- 43.3 = r6,577,mo> 128,571- _, Index 96 Po 11+w~v nwrcfhynJ ~5- ----c-a-—- ...... ...—- E~~s .26 21,772 “fitters .25 1,5339 Value (19?L_L3 = 26,0?g onn) {3’18 Index 92 \o Table 18. (cont'd.) Price 193h (000) Fruit crops Apples, bu. 1.33 7,516 Peaches, bu. 1.63 h,051 Cherries, tons 125.5h h,105 Grapes, tons 61.57 3,626 Pears, bu. 1.35 l,h6l Plums, tons 70.6h 332 Strawberries, crates h.1h 1,367 Value (193h-h3 = 2h,166,000) 22,h58 Index 93 Truck crops for manufacturing Lima Beans, tons 69.92 136 Snap beans, tons 56.80 329 Beets, tons 12.71 bl Cabbage, tons 7.99 88 Sweet corn, tons 12.72 57 Cucumbers, bu. .82 853 Peas, tons 53.h7 3h2 Tomatoes, tons 13.76 238 Truck crops for market Asparagus, crates ZMEI 1.60 186 Snap beans, bu. 1.58 337 Cabbage, tons 22.17 92h Danish cabbage, tons 27.00 321 Cantaloupe, 70# c. 2.19 812 Carrots, bu. .56 227 Celery, early, crates 1.h2 1,1h7 Celery, late, crates .98 1,610 Cucumbers, bu. 1.h2 63 Onions, 50# sacks .99 h,h88 Tomatoes, bu. l.h6 1,382 Value (193h-h3 3 13,566,000) 133581 Index 100 Miscellaneous products Maple syrup, gals. 2.h0 168 maple sugar .35 h Peppermint, lbs. 3.71 2,270 Spearmint, lbs. 2.5h Popcorn, cwt. 2.98 122 Honey 0 13 7 z 93 2 Value (193h-h3' 9,930,000) 10,h96 Index 106 Table 18. (cont'd.) MARKETING INDEX OF ALL FARM PRODUCTS Marketing Index - 1935-39 3 100 Average annual value - l93h-h3 272,531,000 Index, l93h-h3 100.00 Annual value in l93h 238,567,000 Marketing index, l93h 87.5 99 100 Table 19. Annual Index of Physical Volume of Farm Products Marketed by Michigan Farmers, 19311-117. 19311-113 = 100 8 Cash: : ' :Meat 3 z : :Miscel-z Year: fielszeed : Dairy:animals: Poultry: FruitzTruck:laneous : Total : cropszcrops:products: & wool:products:cmps:crops:pmducts: Prod. 1938 89 67 82 86 92 93 100 106 88 1935 107 81 an 77 88 108 89 89 89 1936 97 88 90 8h 92 98 101 97 92 1937 88 83 92 9h 100 73 90 71 90 1938 102 9h 9h 93 92 101 107 110 97 1939 108 107 99 102 92 117 91 ' 123 102 1910 92 125 106 110 96 ' 120 98 - 119 105 19h1 101 108 112 117 102 98 113 112 109 1982 116 128 120 116 112 108 125 128 117 1903 101 116 ‘ 121 .121 138 88 90 ' 89 112 l9hh 118 99 123 132 lhh 117 118 68 123 1985 102 126 13h 12h 189 56 112 79 119 1986 109 1h3 138 125 1&3 118 133 86 127 19h? 99 lh3 132 123 130 91 103 6h 115 -,_ ., 101 1.1-, . I ‘l‘_" .. 11.1.. ..-.12. ‘ l l I _ ..- 2 ... 12......1_.».——._——4 ... l 0--—.». ..81 ..—r ; .....- .._ 4. -4-.-“ . l , ruyylal . _ n . ~40, I 4! ..o“ _ l. l . I ,_V. 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