A higher all-milk price and lower feed cost helped advance the September milk-feed price ratio to 3.21. According to the USDA’s announcement of feed-price ratios on Sept. 27, that is a gain of 0.04 points versus the revised August ratio of 3.17. It also is 0.6 points higher than a year ago when it was 2.61.
The all-milk price used to calculate the September ratio gained 20 cents from August. That puts it at $21.80, which also is $8.80 higher than a year ago.
Baled alfalfa hay declined in price to $135 per ton. That is $2 less than August, but it is still $24 higher than a year ago.
Corn prices also declined. The price per bushel of corn fell 7 cents to $3.19. That is 99 cents more per bushel than a year ago. Meanwhile, soybean prices increased 62 cents to $8.34. That is $3.11 more than a year ago.
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 3.21 ratio in September, a dairy producer could buy 3.21 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.