Milk-feed ratio shows slight improvement

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

Still in bad shape, but maybe poised for a rebound.

That describes the preliminary August milk-feed ratio of 1.35, released Friday afternoon by the U.S. Department of Agriculture.

It is a slight improvement over last month’s ratio of 1.29, which has since been revised upward to 1.34.

The improvement is tied to a higher milk price. The all-milk price improved from $16.90 per hundredweight in July to $17.80 in August, the USDA said.  

But even a 90-cent boost in the milk price can barely stay ahead of rising feed costs.

The price of corn increased from $7.14 per bushel in July to $7.54 in August, according to the USDA calculation. Soybeans increased from $15.40 per bushel to $15.90. Alfalfa hay rose in price by $5 per ton.

The milk-feed ratio is a rough measure of dairy profitability.

The milk-feed ratio represents the pounds of 16-percent mixed dairy feed equal in value to 1 pound of whole milk. Therefore, with a 1.35 ratio in August, a dairy producer could buy 1.35 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.

The ratio is found in the USDA’s monthly “Agricultural Prices” report.



Comments (0) Leave a comment 

e-Mail (required)


characters left

AG10 Series Silage Defacers

Loosen silage while maintaining a smooth, compacted bunker space resulting in better feed and less waste. This unique tool pierces, ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Leads to Insight