The Hog Cycle and the Cobweb Theorem

A surprisingly regular four year cycle in hogs has become apparent in the past ten years. This regularity presents an unusual opportunity to study the mechanism of the cycle because it suggests the cycle may be inherent within the industry rather than the result of lagged responses to outside influences. The cobweb theorem is often mentioned as a theoretical tool for explaining the hog cycle, although a two year cycle is usually predicted. When the nature of the hog industry is examined, certain factors become apparent which enable the cobweb theorem to serve as a theoretical basis for the present four year cycle.