Higher milk prices finally helped push the milk-feed price ratio above the coveted 3.0 profit zone in September. That represents a gain of 0.18 points compared to August. It also tops the September 2002 ratio by 0.76 points.
According to the USDA’s “Agricultural Prices” report, released Sept. 30, the all-milk price used to calculate the ratio increased 80 cents, putting it at exactly $14 for the month. That also tops last year’s all-milk price by $2.40.
Feed cost — the other component of the ratio — offered a mixed bag. The corn price used in the calculation of the September ratio lost only 2 cents during the month, putting it at $2.13 per bushel. That also is 34 cents shy of last year’s corn price.
Meanwhile, the soybean price increased 36 cents — to $6.04 per bushel. That is 65 cents more than the soybean price used in last year’s calculation.
The price per ton of baled alfalfa hay declined $2, which put the hay price at $89 per ton during September. That also is $12 less than a year ago.
Whenever the ratio meets or exceeds 3.0, conditions are favorable for milk production.