A 70-cent drop in the all-milk price caused the February milk-feed price ratio to drop 0.19 points to 2.99, according to the USDA’s “Agricultural Prices” report released Tuesday (Feb. 28).
During February, the all-milk price used to calculate the ratio declined to $13.80 per hundredweight – $1.70 less than the same time a year ago.
Feed prices were mixed – corn and alfalfa were both up while soybeans declined. Corn was up just a penny per bushel to $2.01 while baled alfalfa hay climbed $3.60 to $99.20 per ton. Meanwhile, the soybean price dropped 20 cents to $5.68 per bushel.
February’s milk-feed ratio was 0.19 points lower than the revised January ratio of 3.18 (originally reported as 3.24) and 0.51 points lower than the same month one year earlier. Also revised in the report were the price of corn and soybeans used in the January ratio. Corn was revised up 4 cents to $2.00 per bushel and soybeans were revised up 37 cents to $5.88 per bushel.
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 2.99 ratio in February, a dairy producer could buy 2.99 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. The last time the ratio stood below 3.0 was in July 2005 when it was 2.93.