What Is the Corn-Hog Ratio?

The corn-hog ratio is a valuable tool in the realm of livestock economics, offering insight into the profitability of raising hogs in comparison to cultivating and selling corn feed. It involves a straightforward calculation that juxtaposes the price of a hog against the cost of the corn needed to sustain the hog’s diet.

Key Takeaways

• The corn-hog ratio serves as a barometer for assessing the profitability of livestock farming.
• This ratio is derived by dividing the price of a hog by the cost of the corresponding amount of corn required for its upkeep.
• Additionally, farmers can employ the corn-hog ratio to gauge a crop of corn’s value against the value of a hog, which would be fed with said crop of corn.
• When corn outweighs the hog’s value, farmers may opt to sell the corn and decrease their livestock inventory. Conversely, if hogs hold more value, the corn will be utilized as feed instead of being sold on the market.

Understanding the Corn-Hog Ratio

The application of the corn-hog ratio focuses on the profitability of raising hogs, with the calculation revolving around the price of one hundredweight (cwt) of live hogs divided by the cost of a bushel of corn. This ratio aids farmers in comparing the worth of a corn crop to that of an equivalent amount of feed needed for hogs.

To exemplify, if a hog’s price stands at $50/cwt and a bushel of corn costs $4, the resultant corn-hog ratio would be $50 / $4 = 12.5.

Among livestock, pigs exhibit the highest feed conversion rate, demanding less feed to reach market weight compared to other animals.

Since corn constitutes a primary component in livestock feed, with estimates pegging feed corn at 65% to 70% of a hog’s diet, farmers face the choice of selling the commodity corn or using it to feed their hogs for subsequent sale.

The profitability threshold of the ratio lies above 1:12, marking profitability, while a ratio below signals an unprofitable venture.

Modern Application of the Corn-Hog Ratio

In contemporary times, many farmers eschew growing their feed corn, relying instead on advanced technology and efficient transportation for feed delivery. Despite changes, the corn-hog ratio remains a reliable metric for forecasted profitability in pork farming.

While a mathematical ratio provides clarity, unpredictable events like the 2014 piglet epidemic can disrupt inventory numbers, affecting projected pork outcomes due to fears of scarcity. Nonetheless, the corn-hog ratio endures as a guiding parameter for farmers deciding on livestock holdings.

What Is a Simple Definition of the Corn-Hog Ratio?

The corn-hog ratio, a vital tool in livestock economics, primarily aids in evaluating the profitability of pig farming.

What Happens to Hog Prices if Corn Prices Go Up?

An increase in corn prices typically correlates with a rise in hog prices, mirroring conventional business practices where manufacturing cost hikes translate to higher consumer prices.

How Many Bushels of Corn Does It Take to Raise a Hog to Market Weight?

Roughly more than 10 bushels of corn are needed to reach the market weight of a hog, with potential to reduce costs by blending corn with other feed ingredients.

The Bottom Line

The corn-hog ratio not only aids in calculating the cost of raising hogs to market weight but also influences decisions on livestock and corn sales. External factors such as diseases and fluctuating corn expenses can impact this ratio, prompting farmers to strategize on whether to prioritize hog or corn sales during a given cycle.