THE CORN AND HOGS CASE (PART II) - Raising hogs

Immediately after harvesting the corn, Plowright bought 100 feeder hogs for $150 each, using the proceeds from selling the 5,000 bushels of corn on September 30.

The only cost of raising the hogs was feed, and Plowright fed his hogs exclusively from the corn he harvested. Between October 1 and December 31, he fed 1,000 bushels of corn to the hogs and sold another 1,000; the average market price during the period was $4.40 per bushel. By December 31, the market price of corn had risen to $4.60 per bushel, and the market price of the partially matured hogs was $350 each. He sold half of his hogs on that date.

In January and February, Plowright fed his remaining 50 hogs another 1,000 bushels of corn and sold another 1,000 bushels at the average market price during the period of $4.60 per bushel. At the end of February, he sold all of his hogs--now fully matured_-for $500 each. On the date he sold the hogs, the market price of corn was $4.65 per bushel.

At the end of March, Plowright sold the remaining 1,000 bushels of corn for only $2.50 per bushel. The price of corn had collapsed as a result of a national scare in early March about tampering with packags of cornflakes.