The milk-feed price ratio dropped to 2.75 during January — a decline of just 0.06 points, according to the USDA’s “Agricultural Prices” report, released Jan. 30. Despite the slight decrease, the ratio is still 0.35 points higher than a year ago.
The all-milk price and the prices for alfalfa hay and corn all decreased during January. However, the price for soybeans continued to climb.
The all-milk price used in the calculation dropped another 60 cents during January — to $13.10. However, that is still $1.40 higher than the all-milk price used last year.
The corn price used in the January calculation decreased 12 cents — to $2.20 per bushel. That is 13 cents less than last year’s corn price.
Alfalfa hay also is cheaper than it was during January 2003. The price of baled alfalfa hay fell $4.30 — to $83.60 per ton. That is $14.90 less than a year ago.
Meanwhile, the soybean price used in the calculation escalated on both a monthly and yearly basis. It climbed another 65 cents during January — to $7.82 per bushel. The increase also means it is $2.31 higher than January 2003.
Whenever the ratio meets or exceeds 3.0, it is considered profitable to buy feed and produce milk.