The milk:feed ratio, a measure of farm profitability fell to 1.65 during December 2012. Farm profits had begun to improve during the latter part of 2012 but a fall in milk prices in December has put further pressure on profits. During the month of November 2012 the milk:feed ratio stood at 1.73 while a year ago the ratio was 1.88. A fall in milk prices along with an increase in the price of alfalfa hay and corn prices remaining at elevated levels combined to reduce profits on US dairy farms during the month of December.
The index of prices received by US dairy farmers for dairy products sold during December 2012 stood at 162. This is down 3.6% from the previous month but is 7.3% higher than December 2011. This December all milk price of $21.10 per cwt is 90 cents less than that paid to farmers in November. The state of Florida bucked the national trend increasing their milk price in December by 70 cents to $26.40 per cwt, 25% higher than the national average.
Source: ADPI
