The milk-feed ratio posted a nice gain in August.
It rose to 1.76, compared to a revised ratio of 1.57 for July, according to the USDA’s “Agricultural Prices” report released Monday. A year ago, the ratio stood at 1.81.
The current ratio of 1.76 means that a dairy producer can buy 1.76 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.
Improvements in the August milk-feed ratio came about as the result of lower feed prices and higher milk prices.
The corn price used to calculate the ratio in August was $3.31 per bushel, down 29 cents from $3.60 in July. The price of baled alfalfa hay fell to $111 per ton in August from $120 per ton in July. Soybeans fell to $10.70 per bushel from $10.80 in July.
The all-milk price used to calculate the ratio was $11.80 per hundredweight — up 50 cents from July.