Things still aren’t profitable in the dairy industry, but they are getting better.
According to the “Agricultural Prices” report released Wednesday by the USDA, the milk-feed ratio has jumped to 2.38 from last month’s adjusted figure of 2.23. A year ago, the ratio stood at 1.92.
The current ratio of 2.38 means that a dairy producer can buy 2.38 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.
Improvements in the December milk-feed ratio came about as the result of higher milk prices.
The corn price used to calculate the ratio was $3.59 per bushel, down 6 cents from November. The price of baled alfalfa hay stayed the same at $110 per ton. Soybeans rose 43 cents per bushel to $9.96.
The all-milk price used to calculate the ratio was $16.30 per hundredweight — up $1 from November.
Source: USDA "Agricultural Prices" report