Strong milk prices gave the milk-feed price ratio another boost during October. The ratio advanced to 3.23 — 0.12 points higher than September. It also beats last year’s ratio by 0.77 points. The ratio hasn’t been this strong since November 2001.
According to the USDA’s “Agricultural Prices” report, released Oct. 31, the all-milk price used to calculate the ratio increased 40 cents during October, putting it at $14.80. That also tops the all-milk price used last year by $2.70.
The higher ratio also is the result of lower corn and alfalfa-hay prices.
The corn price used in the October calculation fell 18 cents during the month — to $2.02 per bushel. That also is 32 cents shy of last year’s corn price.
Meanwhile, the price per ton of alfalfa hay dropped 20 cents during October — to $88.80 per ton. That also is $13.20 or 13 percent less than a year ago.
Despite a decrease in corn and alfalfa prices, the soybean price used in the calculation increased on both a monthly and yearly basis. The price climbed to $6.94 per bushel — 88 cents more than September. That also is $1.74 or 33 percent higher than the soybean price used to calculate the ratio last year.
Reduced cow numbers are expected to keep milk production in check through the end of the year, which should help keep the ratio above 3.0. Whenever the ratio meets or exceeds 3.0, it is considered profitable to buy feed and produce milk.