Things are getting better
According to USDA’s “Agricultural Prices” report on Tuesday, the preliminary all-milk price in June is $15.80 per hundredweight, up 70 cents from May.
And, with corn and soybean prices pretty much unchanged, that means higher profitability, as measured by the USDA’s milk-feed ratio. The ratio rose to 2.33 in June, compared to a revised ratio of 2.19 in May.
A ratio of 2.33 means that a dairy producer can buy 2.33 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 June’s ratio was $3.38 per bushel, down 10 cents from May. Soybeans fell slightly in price from $9.41 per bushel in May to $9.38 in June. The price of baled alfalfa hay fell from $121 per ton in May to $119 in June.
As bad as a 2.33 milk-feed ratio may seem, it is better than the 1.45 ratio in June 2009.
Source: USDA "Agricultural Prices" report, June 29