Mike Brumm Commentary, Diet ingredient options, August 6th 2012
Yesterday I was involved with a nutritionist reviewing feed ingredient options for the coming year in swine diets. One of the more interesting items he put together for our discussion was review of how the price relationship among various diet ingredients has changed.
For example, last winter he had corn at $6.24/bu, hipro soybean meal at $289/t and DDGs at $184/ton. Relative to the corn price on a lb/lb basis, meal was 130% the price of corn and DDGs was 83% of the corn price.
With corn now at $7.88/bu, hipro soybean meal at $525/t and DDGs at $272, the relationship has changed. Soymeal is now 187% the price of corn and DDGs are 97% the price of corn and in many instances +100% the price of corn.
When you start thinking of alternatives to corn, these price relationships are very important. DDGs prices have risen faster than corn prices suggesting that increasing the amount of DDGs in a diet to lower the cost of gain isn’t as attractive as it might appear. The saving grace for DDGs inclusion is the very large increase in soybean meal price relative to corn. The goal of diet formulation in this scenario, depending on local ingredient prices, is increasing the use of synthetic amino acids and even DDGs to reduce the amount of soybean meal in the diet. Next week the goal may change as prices change.
With the competition for feed ingredients by all species in the livestock sector this coming year due to the drought pencil pushing will be necessary on a weekly basis for many as ingredient purchase decisions are being made.
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