High feed costs: Using modelling to create savings

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Over the past year, there has been a marked rise in feed costs. Various strategies to address managing feed costs are currently being explored. This article is the third in a series that began earlier this month. Check your inbox for the emails sent on Friday, September 3 and Tuesday, September 7 for more information.

In the previous articles, Alberta Pork highlighted some of the strategies that may be employed to curb feed costs. In particular, we focused on the delivering hogs a week earlier and shipping at lighter weights. This week, the article looks at feed cost modelling.

Feed cost modelling calculator

It is sometimes tricky to talk about the cost of feed, as it depends on the timeframe for which the cost is being calculated and the type of ingredients being used. For the past three years, Alberta Pork has published a weekly marketing report, prepared by Steve Dziver from Commodity Professionals Inc. The report often includes feed cost estimates and related commentary. These feed costs represent the cost of feed for a market hog from birth to slaughter at the date indicated in the report. However, if you are looking to fill your bins today and are wondering how much a hog will cost to feed at current prices, consider using Alberta Pork’s feed cost modelling calculator, developed by Gowans Feed Consulting. Alberta Pork hosted a webinar on Tuesday, August 3 to demonstrate how to use the calculator.

The calculator is a comprehensive feed costing tool designed to allow producers the ability to estimate the cost of feeding pigs through all the stages of production, based on current feed prices. Using the calculator, you can estimate the impact of altering feed ingredient mixes, manufacturing costs, freight costs or altering target weights. Specifically, you can change manufacturing costs, transport costs and the feed budget for breeding stock. Users can modify the feed-to-gain ratio, the number of days on feed, and the initial and ending weights for hogs in each stage of production.

Calculator helps evaluate weight outcomes

When it comes to delivering hogs a week earlier and shipping at lighter weights, the calculator can be used to measure the impact on feed cost. To produce a 129.4 kg live weight market hog (highlighted in red in the first chart below), based on current prices when the latest version of the calculator was published (on Wednesday, August 18), the cost is $177.13. Shipping a week earlier would mean shipping a live weight around 123 kg. Changing the red-highlighted cell to 123 kg (as in the second chart below) results in a feed cost of $166.76. The difference works out to a feed cost savings of $10.37, fairly close to our in-house estimates of $11.05.

Comparing diets

As you discuss diets with your nutritionist, you can use the calculator to compare for yourself the cost impact of altering your diets. For example, Gowans diets indicate a feed cost of $177.13, but if you use rations from Manitoba Agriculture and Resource Development (in the chart below) and change the starter to finisher cells highlighted in green in the first chart above, feed cost increases by $4.15 to $181.28. In the hog industry, where meagre margins mean so much, $4 per hog could mean the difference between profits or losses.

More information

For more information on the data shown here, please contact Bijon Brown, Production Economist, Alberta Pork by email at bijon.brown@albertapork.com or by phone at 780-440-8460, toll-free at 1-877-247-PORK (7675).

If you have any further questions about this article, please contact Darcy Fitzgerald, Executive Director, Alberta Pork by email at darcy.fitzgerald@albertapork.com or by phone at 780-491-3529, toll-free at 1-877-247-PORK (7675).