Milk-feed profitability ratio still tumbling

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According to the USDA’s “Agricultural Prices” report released on Wednesday, the preliminary milk-feed ratio for March is 1.47, down from 1.52 last month.

This report marks the fourth straight month that the ratio has dropped, indicating decreased profitability.

The all-milk price used in calculating the ratio also slipped, dropping from $19.50 per hundredweight in February to $19.10 in March.

The corn price jumped by 14 cents from February ― $7.04 per bushel to $7.18. The soybean price fell slightly, sinking 10 cents to $14.50 per bushel in March.

Alfalfa hay climbed $1 per ton to $219.

Read the report here.

The milk-feed ratio is a rough measure of dairy profitability. It represents the pounds of 16-percent mixed dairy feed equal in value to 1 pound of whole milk. Therefore, with a 1.47 ratio in March, a dairy producer could buy 1.47 pounds of feed for every 1 pound of milk sold.

Some people question how valid the USDA’s milk-feed ratio is. See this story. But the USDA has been using the same formula for years, comparing the same commodities. Therefore, it can serve as a relative measure for comparing different points in time.


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north east  |  March, 27, 2013 at 04:11 PM

But, but, but you just said how well new york dairy is doing!

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