Milk-feed ratio inches higher

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The milk-feed price ratio for September is 1.82, according to the USDA’s announcement on Sept. 29. The ratio is a mere 0.01 points higher than the revised August ratio of 1.81. However, the ratio is still 1.37 points less than a year ago when it was 3.19.

The USDA used an all-milk price of $18 to calculate the September ratio. That price is 40 cents less than the price used to calculate the August ratio. It also is $3.80 less than a year ago.

Feed prices also retracted in September. The corn price of $5.17 is 9 cents less than August. However, it is $1.89 higher than a year ago when it was $3.28 per bushel. The price of soybeans fell to $11.70 per bushel — down $1.10 from August. However, that is $3.55 higher than a year ago. Baled alfalfa hay declined $4 to $176 per ton. One year ago it was $135 per ton.

A ratio of 1.82 means that a dairy producer can buy 1.82 pounds of feed for every pound of milk sold. Whenever the ratio meets or exceeds 3.0, it is considered profitable to buy feed and produce milk.

Source: USDA

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