Milk-feed price ratio matches mid 2009; cull cow prices risePrint
Milk-feed ratio matches mid 2009
Milk-feed price ratio
March Feb. Mar. May
Product 2012 2012* 2011 2009
Milk ($/cwt.) 17.40 17.70 20.40 11.60
Corn ($/bu.) 6.48 6.28 5.53 3.96
Soybeans ($/bu.) 13.10 12.20 12.70 10.70
Alfalfa hay ($/ton) 201 198 142 137
Milk-feed ratio 1.48 1.55 2.12 1.48
* Revised from previous month
Source: USDA National Ag Statistics Service
Higher feed prices, combined with lower U.S. average milk prices, sent the March 2012 milk-feed price ratio down to 1.48, its lowest level since June 2009 (1.47). 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.
At $17.40/cwt., the U.S. average milk price is the lowest since January 2011.
March corn prices averaged $6.48/bushel, up 20¢ from February; soybeans averaged $13.10/bushel, up 90¢; and alfalfa hay averaged $201/ton, up $3 from February.
To see how the dynamics of dairy economics has changed, compare milk and feed prices to May 2009, which also had a milk feed-price ratio of 1.48. While current milk prices are nearly $6.00/cwt. higher than May 2009, that’s offset by feed costs that are substantially higher.
Cull ’em if you got ’em
March 2012 cull cow (beef and dairy combined) prices closed in on $85/cwt., likely the highest on record, according to USDA’s preliminary estimates. March 2012 prices averaged $84.50/cwt., up $2.50/cwt. from February 2012’s revised estimate of $82.00/cwt., and $9.30/cwt. more than the March 2011 average of $75.20/cwt. The March 2012 average puts the beef value of a 1,200-lb. cull cow at more than $1,000/head.