April milk-feed price ratio lowest since early 1990s

The April 2012 milk-feed price ratio could be the lowest dating back almost two decades. 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. 

Higher hay and soybean prices, combined with lower U.S. average milk prices, sent the April 2012 milk-feed price ratio to 1.45, down from a revised estimated of 1.48 in March 2012 and 1.81 in April 2011.

At $16.90/cwt., the U.S. average milk price is the lowest since January 2011, according to USDA’s April Ag Prices report.

Among feed ingredients, corn prices averaged $6.14/bushel in April, down 21¢ from March, but soybean prices rose to $13.80/bushel, up 80¢; and alfalfa hay prices rose $6/ton, to $207/ton.

Looking back into USDA National Ag Statistics Service archives, DairyProfit Weekly found milk-feed price ratios frequently averaged 1.3 to 1.4 in the early 1990s. However, in some cases those ratios were revised upward substantially a couple years later.