Focus on maximizing margins with increasing feed prices using these five areas that may involve feed savings.
After a tumultuous 2020 on and off the farm, America’s pig farmers are now facing extremely high swine feed costs. And, with this run-up in price, feed for pigs now makes up roughly 70% to 80% of total cost of production. It’s a critical time to review the key areas that have the biggest impact on keeping that figure down and margins in the black.
“From weaning to market, swine feed costs are running $95 to $105 per pig, depending on your diets and purchasing strategies,” says Joel DeRouchey, swine nutritionist at Kansas State University (KSU).
Rising Costs of Feed Ingredients
Feed ingredient prices have been on a steady rise since the summer of 2020. Price volatility will rule until the 2021 corn and soybean crop yields are largely determined. Based on global feed supply and demand, along with supply chain and shipping issues, DeRouchey expects feed prices to remain high.
Whether corn is $7, $6 or $5 per bushel, “that’s expensive compared to historical prices,” he points out. “Unless production and market fundamentals change, not just in the United States but worldwide, we’re looking at some sustained high feed prices.”
The same is true for soybean meal. “There are not good alternatives for soybean meal,” DeRouchey says. “We can use more synthetic amino acids, but there’s only so much you can replace. Sometimes changing ingredients or feed alternatives can help offset costs, but the challenge now is that everything is expensive.”
Some of this price parity exists because most ingredient and alternative feedstuff prices are tied to corn and soybean meal prices.
Market hog prices also are at historical highs for now, so focusing on margins is key. This means zeroing in on swine feed costs, efficiencies and management. For that, DeRouchey suggests going back to the basics and targeting the major areas that make up wean-to-finish production.
KSU has an array of calculators and evaluation resources from nutrient models for growing pigs to DDGS calculators to a feed efficiency evaluation tool and much more.
Major Areas to Seek Swine Feed Cost Savings
Fat Use in Summer Diets
Often producers increase fat levels in summer diets to keep pigs growing during hot-weather months. This year, fat prices are at or near historical highs.
“In all of our calculations across the Midwest, adding fat has not been economical this summer in most locations,” DeRouchey says.
At the individual farm level, he advises producers to work with their nutritionist to evaluate total feed costs with added fat. The goal is to see if adding fat pencils out with the potential extra revenue of selling a slightly heavier pig.
Distillers Dried-Grains with Solubles (DDGS)
DDGS has become a staple in swine diets with inclusion rates influenced by packer specifications, as well as the farm’s distance to an ethanol plant and transportation costs. In general, the 10% to 20% inclusion level has become routine and does offer some limited cost savings. There may be price breaks and supply security in buying DDGS through private brokers or directly from the plants. This is quite variable.
Last year’s pressures closed or cut plant capacity and some of that impact is lingering. However, DDGS supplies should be sufficient, DeRouchey says, unless corn prices rally to the point where the plants can’t operate economically. He underscores the importance of maintaining open communication with ingredient suppliers.
Feed Processing and Feeder Basics
When it comes to maximizing swine feed digestibility, grinding corn to 500 to 550 microns is best. That particle size allows feed to flow through the system while allowing pigs to digest efficiently. DeRouchey does point out grain that is ground using a roller-mill typically flows better than grain ground with a hammer mill, so that’s a consideration when grinding to these particle sizes.
After particle size, focus on feeder adjustments as a daily task. Feed flow can vary much more than you might realize. Since feeders are all different, train your eyes to look for a 40% to 50% feed-pan coverage. It’s a fine balance. You don’t want to restrict pig growth, but you never want feed wasted either. Finally, check lines from the bulk bins to the feeders daily to ensure nothing is plugged and no bridging is happening. Of course, always check for leaks and spills. “These things are important even when swine feed cost is lower than it is currently,” DeRouchey notes.
For more ideas, check out Why It Pays to Stop Feed Wastage Now.
Review Nutrient Requirements
“Make sure that current diets are balanced in an economical way to meet the nutrient needs of the pigs they’re designed for,” DeRouchey says. For example, genetic suppliers provide diet and nutrient requirements that are often designed to maximize performance. But in times like this, it can simply be too costly. He advises working with your genetic supplier and/or nutritionist to review various amino acid ratios, particularly dietary lysine. At the same time, be careful not to cut amino acids too much or feed efficiency will suffer. “Often these are minor differences in formulation to save some incremental savings,” he adds.
Make sure the right pigs are getting the right diets on the right schedule. Today, feed budgets are set up and carried out with good accuracy. You don’t want to overfeed expensive diets to pigs longer than is needed or to the wrong group of pigs. Check your feed-delivery records and if the amounts or the feed mill reveal inaccuracies, “it’s a good time to revisit things so that you’re not over budgeting,” DeRouchey says.
Swine Herd Health, Market Timing Affect Cost
Although they may be a step removed, how you manage your herd’s health status and marketing strategies can have an outsized effect on your bottom line, especially with high feed costs.
Any mortality in the growing phase will negatively impact feed efficiency and swine feed costs. The closer to market weight the greater the impact. For example, a 250-pound finishing pig has already consumed 600 pounds of feed. If it never gets to market it provides zero revenue. This drives home the need to herd health vigilance.
Likewise, maintaining the proper barn environment for the season and the pigs’ comfort is always important. It takes on new meaning today. The same is true for timely vaccination and treatment programs. Maintain biosecurity protocols on the farm, but also those associated with transport vehicles. “It all goes back to health; it’s a big performance and economic driver,” DeRouchey says.
Whether to add a few extra pounds to market hogs to try to increase revenue is a complicated question with many variables. It’s based on genetics, pig performance, packer requirements, pig flow and facility space. DeRouchey admits, “This is an abnormal year. We have historically high hog prices. Producers will sell heavy pigs if they can balance it with high feed costs.”
Source: Pork Checkoff