2-6 IAN Dairy Ratio

  The milk to feed price ratio has a lot to do with the state of the dairy industry.

 University of Idaho’s brilliant agricultural economist Garth Taylor and I chatted the other day about all kinds of agricultural trends and then, sadly, we touched on the dairy industry. Producers are selling milk by the hundredweight… The weight of their hundred dollar bills isn’t so great because of feed prices: “ the dairy industry is in trouble. I looked at what they call the milk to feed price ratio. It is kind of a parity index. It measures a bundle of feed that you feed a cow In one day. So many pounds of hay were so many pounds of corn or silage versus the milk that is produced in that day by the cow. It is a rough approximation of how we are doing in terms of covering the break even. That hit an all time low in July of 2012. You thought milk prices in 2009 were bad relative to feed, this hit an all-time low. It was high priced feed knocking the wind out of these farmers.”