Believe it or not, the milk-feed ratio in September was better than it was in September 2008.
According to USDA’s “Agricultural Prices” report released Tuesday, the milk-feed ratio in September was 1.93, up from an adjusted 1.78 in August and 1.90 a year ago.
The current ratio of 1.93 means that a dairy producer can buy 1.93 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 September ratio came about as a result of lower feed prices and higher milk prices.
The corn price used to calculate the ratio in September was $3.32 per bushel, which is down a penny from the August price. The price of baled alfalfa hay fell to $110 per ton in September from $111 per ton in August. Soybeans fell to $9.85 per bushel from $10.80 in August.
Feed prices were much higher a year ago.
The all-milk price used by the USDA to calculate the ratio was $12.70 per hundredweight in September, up 70 cents from August.