The present Iowa farm price index has been in use since 1926. It is widely employed as a measure of the general level of Iowa farm prices and appears each month in the price barometer published in Agricultural Economic Facts². A few years ago Peck³ developed a farm lease, known as the sliding scale lease, in which the rental payments are based on and vary with the changes in the index number. More recently, contracts covering land sales have been devised in which the interest payments and in some cases also the principal payments are based on this farm price index⁴.

The enactment of the Agricultural Adjustment Act, May, 1933, has occasioned much current interest in parity price which is now computed each month for Iowa and also appears in Agricultural Economic Facts. In the computation of a parity price for the state, it is necessary to have an index of Iowa farm prices. These uses to which the index is put illustrate both the growing interest in such an index and the importance of the greatest possible accuracy in its construction.