A strong all-milk price and lower feed inputs nudged the August milk-feed price ratio to 3.24. That is a gain of 0.07 points from July, according to the USDA’s announcement of feed-price ratios on Aug. 31. One year ago, the ratio was 2.48.
The all-milk price used to calculate the August ratio stood unchanged from July at $21.70. That also is $9.70 higher than a year ago.
Baled alfalfa hay, at $137 per ton, also was unchanged from July. That is $28 higher than a year ago.
Meanwhile, corn and soybean prices fell slightly. The price for a bushel of corn fell 15 cents to $3.17. It is still $1.08 more per bushel than a year ago. The soybean price used to calculate the ratio was $7.49, down 7 cents per bushel. One year ago, soybeans were $5.23.
The USDA revised the July ratio, decreasing it from 3.19 to 3.17.
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 3.24 ratio in August, a dairy producer could buy 3.24 pounds of feed for every 1 pound of milk sold.
Whenever the ratio meets or exceeds 3.0, it is considered profitable to buy feed and produce milk.