What does Corn/Hog Ratio mean?
Corn/Hog ratio is a feed ratio applicable for hogs. A feed ratio gives a relationship of the total cost of feed, expressed as a ratio to the sale price of animals. The corn/hog ratio typically is stated as the # of bushels of corn that equals the dollar value of 100 pounds of live hogs. If 100 pounds of live hogs is $40/cwt and corn is trading at $2/bushel, the corn/hog ratio would be 20-to-1.
As main feed for hog is corn, the corn-hog ratio is the current price of a hog and the total cost incurred on feeding the hog till sale or slaughter date.
Futures Knowledge Explains Corn/Hog Ratio
Historically, the standard hog-corn ratio was defined as the ratio of the market price of a pig with a mass of 1460 slugs to the market price of a U.S. bushel of corn. The slug is an English unit of mass.
The hog-corn price ratio is a useful measure of pork production profitability. Higher pork prices and lower corn prices brings more profits for farmers of feeding hogs.