Despite strong milk prices, the milk-feed price ratio fell 0.15 points during November — to 3.09. However, the ratio is still 0.65 points higher than last year, according to the USDA’s “Agricultural Prices” report, released Nov. 28.
The report also shows the all-milk price used to calculate the ratio declined slightly. Although still strong, it fell 10 cents during November — to $14.90. That also tops the all-milk price used last year by exactly $3.
But perhaps the biggest reason for the slight decrease in the ratio is higher corn and soybean prices.
The corn price used in the November calculation increased 12 cents during the month — to $2.24 per bushel. However, that is just 4 cents shy of last year’s corn price.
The soybean price used in the calculation also increased — most likely in response to a soybean crop that is predicted to be the smallest in six years. The price climbed to $7.37 per bushel — 76 cents more than October. That also is $1.91 higher than the soybean price used to calculate the ratio last year.
Despite gains in both the soybean and corn prices, the price per ton of alfalfa hay declined 80 cents during November — to an even $88 per ton. That also is $13 less than a year ago.
Although the ratio slipped a notch during November, it is still expected to stay above 3.0 going into 2004. Whenever the ratio meets or exceeds 3.0, it is considered profitable to buy feed and produce milk.