Making sense of livestock-to-feed ratios
FCC Economic Researcher Martha Roberts explains how livestock-to-feed ratios can help you monitor the market and stay profitable.
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- A livestock-to-feed ratio is the price of livestock divided by the price of major feed grain
- Patterns in the livestock-to-feed ratio help understand trends in profitability
- Producers who raise livestock and grow grains can use the livestock-to-feed ratio to decide if their grain is worth more as a commodity or as feed
- Producers who only own livestock can spend less on feed or even liquidate some of their herd if feed prices are too high