Milk-feed ratio continues descent
By Dairy Herd staff
| Saturday, March 01, 2008
The milk-feed price ratio continues to descend. According to the USDA’s announcement of feed-price ratios on Feb. 29, the February ratio is 2.36. That is a 0.3-point loss from the January revised ratio of 2.66. It also is a mere 0.03 points higher than a year ago.
The ratio’s setback is the result of a drop in the all-milk price used to calculate the ratio coupled with gains in the prices of corn, soybeans and alfalfa hay.
An all-milk price of $19.30 was used to calculate the February ratio. That is $1.20 less than the January all-milk price. However, it is still $4.40 higher than a year ago.
The corn price used to calculate the ratio increased 28 cents to $4.25 per bushel. That is 81 cents higher than a year ago.
The cost of soybeans increased $1.04 to $11 per bushel. That is $4.13 more than a year ago.
Baled alfalfa hay increased $3 in price to $138 per ton. That is up $23 per ton versus a year ago.
The milk-feed ratio represents the pounds of 16-percent mixed dairy feed equal in value to 1 pound of whole milk. The price of commercial prepared dairy feed is based on current
Whenever the ratio meets or exceeds 3.0, it is considered profitable to buy feed and produce milk.
Source: USDA
