What does Feed Ratio mean?
A measure of the profitability of raising livestock. A feed ratio is calculated by dividing the price of an animal by the total cost incurred on its feeding to raise the animal to marketable weight level.
Futures Knowledge Explains Feed Ratio
The feed ratios are widely used as indicators in livestock futures markets. For example, as main feed for pig is corn, the feed ratio for pig, known as hog-corn ratio, is the current price of a pig and the total cost incurred on feeding the pig till date. The hog-corn price ratio is a useful measure of pork production. Higher livestock prices and lower feed prices bring more profits in livestock breeding. People will expand their livestock holdings.