Lower milk prices combined with higher corn costs, reducing USDA’s index of the relationship between the value of milk and dairy feed – the milk-feed price ratio.

The preliminary December 2014 milk-feed price ratio was estimated at 2.38, down from November’s revised estimate of 2.74, but still above the 2.30 ratio in December 2013.

With the December estimate, the preliminary 2014 average ratio is 2.54, the highest annual average since 2007’s average of 2.80.

The index is based on the current milk price in relationship to feed prices for a ration of 51% corn, 8% soybeans and 41% alfalfa hay.

The December 2014 U.S. average all-milk price was $20.30/cwt., compared to $23.00/cwt. in November 2014 and $22.00/cwt. in December 2013. 

December corn, at $3.77/bushel, was up 19¢ from November, but 64¢ less than December 2013.

December 2014 soybeans averaged $10.20/bushel, unchanged from November, but $2.80 less than December 2013.

Alfalfa hay averaged $183/ton in December, down $1 from November 2014 and $3 less than December 2013. Highest alfalfa hay prices were found in California, Nevada, New Mexico, Oregon, Pennsylvania, Texas and Washington, all above $215/ton.

 

Milk-feed price ratio*

 

 

 

Dec. 2013

Nov. 2014

Dec. 2014

Milk ($/cwt.)

22.00

23.00

20.30

Corn ($/bu.)

4.41

3.58

3.77

Soybeans ($/bu.)

13.00

10.20

10.20

Alfalfa hay ($/ton)

186

184

183

Milk-feed ratio    

2.30

2.74

2.38

Source: USDA Ag Prices report

 

* The price of commercial prepared dairy feed is based on current United States prices received for corn, soybeans, and alfalfa hay. The modeled feed ration uses 51% corn, 41% alfalfa hay and 8% soybeans