All-milk price rises 40 cents in May

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Milk prices rose slightly in May.

According to USDA’s “Agricultural Prices” report on Friday, the preliminary all-milk price in May is $15 per hundredweight, up 40 cents from April.

And, with corn and soybean prices unchanged to slightly lower, that means higher profitability, as measured by the USDA’s milk-feed ratio. The ratio rose to 2.20 in May, compared to a revised ratio of 2.18 in April.

A ratio of 2.20 means that a dairy producer can buy 2.20 pounds of feed for every pound of milk sold. Whenever the ratio meets or exceeds 3.0, it is considered profitable to buy feed and produce milk.

The corn price used to calculate May’s ratio was $3.41 per bushel, unchanged from April.  Soybeans fell in price from $9.47 per bushel in April to $9.28 in May. However, the price of baled alfalfa hay increased $8 per ton to $121.

As bad as a 2.20 milk-feed ratio may seem, it is better than the 1.48 ratio in May 2009.

Source: USDA "Agricultural Prices" report

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