The economics of feed efficiency and decision-making in swine production
No question feed efficiency is a robust benchmark and a key driver for many decisions. Yet, are we utilizing these benchmarks correctly?
We know that the feeding program for pigs significantly impacts profitability, as feed cost accounts for up to 75% of total production cost.
Within the feeding program, energy alone could represent 50% or even more of the total cost. Thus, dietary energy is critical in swine diets and becomes essential to understanding feed efficiency.
A key question we need to ponder: Is lower feed efficiency always better?
Well, not quite.
It must be economical!
A simple example would be increasing dietary energy by adding 3% fat in the diets; it will very likely improve feed efficiency, but will it be economical? It will depend on the cost of ingredients and pig price.
The classical definition of feed efficiency is unit of feed consumed per unit of body weight gain per (F/G). Some scientific journals use the inverse of that, gain to feed ratio (G:F), for reasons that we will not discuss today – but trying playing with these two parameters on an Excel spreadsheet, plot that on a graph, and you might find some very interesting. Another approach to expressing feed efficiency is on a caloric efficiency basis instead of feed consumed, represented as caloric F/G.
Let’s do some simple math to figure out the value of 0.01 F/G, with the example below:
- Average feed price: $0.14 per pound (lb)
- 0.01 improvement in F/G x 260 lb of body weight gain during the finishing phase x $0.14 = $0.36 per pig
- Thus, 0.01 F/G in this scenario saves $0.36 per pig.
In a decision-making situation, you want to decide if a given intervention (i.e., added fat, a feed additive, or a management practice) in the production system will be worth it. For example, suppose the intervention improves F/G by 0.10, which means it will bring an added value of $3.6 per pig before subtracting the intervention cost.
How about after subtracting the intervention cost? Does it still leave a substantial economic benefit?
Those are the types of scenarios that you, as a swine industry professional, need to be calculating to maximize the producers’ profit so they can continue in business to accomplish this critical goal:
Feed the world.
p.s. a few times a year, we open seats to the Elite Swine Nutritionist Program. That time is coming up in 7 days… Monday, June 28th at 10 am CST; we will open ONLY 20 seats. We have seen those seats vanish in a few hours, so please add that to your calendar if you are interested.
To join the waitlist go to www.EliteSwineNutritionist.com