The milk-feed price ratio fell 0.18 points — to 3.28 for December, according to the USDA’s “Agricultural Prices” report released Dec. 29. That also is 0.39 points less than a year ago.
The ratio’s decline is the result of lower milk prices and higher feed cost.
During December, the all-milk price used to calculate the ratio decreased 40 cents — to $14.70 per hundredweight. That also is $1.70 less than the December 2004 ratio.
Meanwhile, feed prices advanced slightly during December. The corn price increased 11 cents per bushel — to $1.88. That also is 16 cents less than a year ago. The soybean price gained 9 cents, putting it at $5.71 per bushel. That also is 26 cents higher than December 2004. Baled alfalfa hay climbed 20 cents — to $97.70 per ton. That is up $5.60 per ton versus a year ago.
In its monthly report, the USDA also revised the November ratio, increasing it 0.02 points — to 3.46 versus the 3.44 ratio reported at the end of November. The upward revision is the result of a slight decrease in corn and soybean prices. The milk price and the price of baled alfalfa hay were unchanged.
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 3.28 ratio in December, a dairy producer could buy 3.28 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.