Milk-feed ratio unchanged

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The milk-feed price ratio did not budge between May and June. According to the USDA’s “Agricultural Prices” report released today, the June ratio is 1.47, which is unchanged from May, but down from 1.88 a year ago.

The all-milk price used by the government to calculate the ratio fell another 20 cents — from $11.60 in May to $11.40 per hundredweight in June. One year ago, the all-milk price used to calculate the ratio was $19.30.

Feed prices used in the June calculation were mostly lower. The price of baled alfalfa hay decreased $10 — from $138 in May to $128 per ton in June. The corn price used to calculate the June ratio was $3.93 per bushel, down 4 cents versus May. Soybeans continued to post gains — increasing 90 cents from $10.70 to $11.60 per bushel.

Feed prices are still lower than a year ago. Alfalfa hay was $172 per ton in June 2008; soybeans were $13.10 per bushel; and corn $5.47 per bushel.

Whenever the ratio meets or exceeds 3.0, it is considered profitable to buy feed and produce milk.

Source: USDA



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