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.
BREAKING DOWN '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.