Lower milk prices caused the January milk-feed price ratio to fall slightly to 3.24, according to the USDA’s “Agricultural Prices” report released Tuesday.

During January, the all-milk price used to calculate the ratio decreased 30 cents to $14.50 per hundredweight.

Feed prices were generally lower, which prevented any further decline in the milk-feed ratio. The soybean price fell 26 cents from December's estimate to $5.51 per bushel. Baled alfalfa hay fell $2.10 to $95.60 per ton. Meanwhile, the corn price increased 4 cents per bushel to $1.96.

January’s milk-feed ratio was 0.03 points lower than December’s and 0.21 points lower than the same month a year earlier.

In its monthly report, the USDA revised the December ratio, decreasing it 0.01 points from the 3.28 ratio reported on Dec. 29.

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 January, 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.

 

   USDA