The milk-feed price ratio has dropped again. According to the USDA’s announcement of feed-price ratios on Feb. 28, the February ratio is 2.32, a loss of 0.1 points versus January. One year ago the ratio was 2.92.
The all-milk price used to calculate the February ratio increased 20 cents to $14.70. One year ago, the all-milk price was $13.50.
The corn price used to calculate the February ratio climbed 27 cents to $3.32 per bushel. Soybeans increased 45 cents to $6.83 per bushel. One year ago, the prices for corn and soybeans were $2.02 and $5.67, respectively.
The USDA issued a revision to the January milk-feed ratio, increasing it from 2.34 to 2.42. The revision is due to a slight decrease in feed prices for January and a 10-cent gain in the January all-milk price.
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 2.32 ratio in February, a dairy producer could buy 2.32 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.