Tuesday, March 30, 2010

Milk Feed

USDA's "Agricultural Price" report is out today and available at: http://usda.mannlib.cornell.edu/usda/current/AgriPric/AgriPric-03-30-2010.pdf

On page 33 is the milk feed ratio number, which has dropped (not good) from February.

In foot note 4 USDA states, "The price of commercial prepared dairy feed is based on current U.S. prices received for corn, soybeans, and alfalfa. The modeled feed uses
51 percent corn, 8 percent soybeans, and 41 percent alfalfa."

USDA continues to avoid pricing farm milk based on costs. So, how is this number conjured up? This is really not a real number. The number is "weighted." So this means, probably corn and soy, fob Iowa and Alfalfa fob Nebraska, maybe.

So, as trucking costs go up, this number has no way of tracking reality.

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