A Farm Credit Canada researcher suggests hog producers look a the hog-to-corn ratio to help forecast their profitability.
Martha Roberts says the ratio is based on how many bushels of corn it takes to equal the value of 100 pounds of hog, live weight.
A low ratio means the price of corn is high, so you need fewer bushels to get to the same price as that 100 pounds of hog.
A low ratio suggests lower profits, a high ratio - higher profits.
Roberts says the futures markets suggest weakness in hog prices for the remainder of this year.
The markets suggest corn prices will climb.
She says that's going to mean a declining hog to corn ratio for the remainder of this year, slowly recovering through the first half of 2016.
The FCC researcher believes that while profitability shows a slight decline, the trend in the hog-to-corn ratio for the next twelve months compares favourably with the trend of the past ten years.
