Milk-feed ratio moves higher
By Dairy Herd staff
| Monday, November 03, 2008
The milk-feed price ratio gained more ground in October. According to the USDA’s announcement of feed-price ratios on Oct. 31, the ratio is 2.12. That is 0.23 points higher than September. However, the ratio is still nearly a point less than a year ago when it was 3.10.
The USDA used an all-milk price of $17.60 to calculate the October ratio. That price is 60 cents less than the price used to calculate the September ratio. It also is $3.80 less than a year ago.
Feed prices retracted substantially in October. The USDA used a corn price of $3.99 per bushel to calculate the October ratio. That is $1.03 less than the September price, but still 70 cents higher than a year ago. The price of soybeans fell $2.04 — to $8.66 per bushel. That is 30 cents higher than a year ago. Baled alfalfa hay declined $4 to $172 per ton. One year ago it was $136 per ton.
A ratio of 2.12 means that a dairy producer can buy 2.12 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.
Source: USDA
