| Understanding the milk-to-feed price ratio as a proxy for dairy farm profitability. | |
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MedLine Citation:
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PMID: 20855028 Owner: NLM Status: MEDLINE |
Abstract/OtherAbstract:
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This research examines the definition, historical pattern, and utility of the milk-to-feed price ratio (MF) as a measure of dairy farm profitability. The MF was generally an acceptable proxy of profitability in an annual sense from 1985 to 2006. The MF was steady at an average of 2.8 from 1985 to 2006 even as average annual milk price in nominal terms increased from $12 to $14/hundredweight. An alternative proxy for profitability is income over feed costs, which is measured in dollars per hundredweight. Comparison with an actual profit measure, rate of return on assets, is used to examine the appropriateness of the proxies. The volatility from 2007 to 2009 resulted in MF being a poor measure of profitability over that period. The implication is that MF is not the preferred measure of profitability when a significant change in the pattern of one or both price series occurs. Income over feed cost is a better measure of profitability in periods of volatility. |
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Authors:
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C A Wolf |
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Publication Detail:
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Type: Journal Article |
Journal Detail:
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Title: Journal of dairy science Volume: 93 ISSN: 1525-3198 ISO Abbreviation: J. Dairy Sci. Publication Date: 2010 Oct |
Date Detail:
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Created Date: 2010-09-21 Completed Date: 2010-12-30 Revised Date: - |
Medline Journal Info:
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Nlm Unique ID: 2985126R Medline TA: J Dairy Sci Country: United States |
Other Details:
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Languages: eng Pagination: 4942-8 Citation Subset: IM |
Copyright Information:
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Copyright © 2010 American Dairy Science Association. Published by Elsevier Inc. All rights reserved. |
Affiliation:
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Department of Agricultural, Food, and Resource Economics, Michigan State University, East Lansing 48824, USA. wolfch@msu.edu |
Export Citation:
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| MeSH Terms | |
Descriptor/Qualifier:
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Animal Feed
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economics* Animals Commerce Dairying / economics* Income Milk / economics* |
From MEDLINE®/PubMed®, a database of the U.S. National Library of Medicine
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