Corn/Hog Ratio

AAA

DEFINITION of 'Corn/Hog Ratio'

A feed ratio used to determine the profitability of raising livestock. The corn/hog ratio is the price of one hundred pounds of hog (cwt) divided by the price of a bushel of corn. The ratio is used to help farmers determine the value of a crop of corn compared to the value of a hog that they would have to feed with the same crop of corn.


For example, if the price of a hog is $50/cwt and the price of a bushel of corn is $4, the corn/hog ratio would be $50/$4, or 12.5.

INVESTOPEDIA EXPLAINS 'Corn/Hog Ratio'

Corn is used in this feed ratio because it is a major feed type used in raising livestock. Many farmers who grow corn could either sell the corn itself as a commodity, or could feed it to their hogs and then sell the hogs.


If corn is more valuable than the hog then the farmer would sell the corn and reduce the livestock inventory. If hogs are more valuable than the corn, then the farmer would feed the corn to the hog, thus selling less corn on the market.

RELATED TERMS
  1. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  2. Feed Ratio

    The relationship between the price for which a unit of livestock ...
  3. Hundredweight - Cwt

    A unit of measurement for weight used in certain commodities ...
  4. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  5. Pork Bellies

    A cut of pork that comes from the belly of a pig. Pork bellies ...
  6. Genetic Engineering

    The artificial modification of an organism’s genetic composition. ...
Related Articles
  1. An Overview Of Commodities Trading
    Options & Futures

    An Overview Of Commodities Trading

  2. Commodities: The Portfolio Hedge
    Active Trading

    Commodities: The Portfolio Hedge

  3. Commodity Prices And Currency Movements
    Forex Education

    Commodity Prices And Currency Movements

  4. Learn To Corral The Meat Markets
    Active Trading

    Learn To Corral The Meat Markets

comments powered by Disqus
Hot Definitions
  1. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  2. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  3. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  4. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  5. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
  6. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
Trading Center