Milk to feed price ratio (MFPR)
Updated 27 February 2020
The milk to feed price ratio (MFPR) shows the value of milk compared with the cost of purchased feed. Feed costs account for around 70% of variable costs. The MFPR gives an indication of inputs costs in relation to income. It is updated on a monthly basis
There are two ratios quoted – the calculated MFPR, which is based on feed prices and projected milk prices, and the actual MFPR, which are provided by Kingshay and Promar Milkminder.
Actual vs calculated MFPR
- The actual MFPR is normally provided two to three months in arrears.
- The calculated MFPR is based on projected farmgate price movements and calculated concentrate prices.
- The MFPR is an indicator only and not a replacement for analysis on the full costs of production.
- The ratio will increase if either farmgate milk prices increase or concentrate prices decrease.
- The ratio will vary greatly from farm-to-farm depending on milk price achieved and type of feed used. The ratio should only be used as a guide to the cost-revenue relationship in the country.