Small Improvement to Milk-Feed Ratio
A record-tying U.S. average milk price wasn't enough to drastically improve the monthly milk-feed price ratio, but November’s index did represent the 5th consecutive month of small improvements, according to USDA’s latest Ag Prices report.
The higher milk price, combined with slightly lower corn and soybean prices, helped push the preliminary November milk-feed price ratio to 1.79, the highest since last December. However, it remains below a year ago, and marks the 20th consecutive month below 2.0. 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 $22.10, the preliminary November U.S. average all-milk price equals a record high set last August. Average corn ($6.71/bushel) and soybean ($13.80/bushel) prices were the lowest in five months, but dry alfalfa hay prices ($215/ton) returned to the 2012 high set last May.
According to USDA, the average annual milk-feed price ratio was 1.88 in 2011 and 2.26 in 2010.
If you're looking for the "glory days” for the milk-feed price ratio, the index was higher than 3.0 in 6 of 8 years between 1997 and 2005.