Create a free Feed Strategy account to continue reading

What impact do lower grain prices have on feed formulations?

Whether it pays off to change feed formulations depends on the economics of other ingredients in relation to cereals.

When cereals, such as corn and wheat, become abundant after an excellent harvest season, feed formulators start looking into their feeds expecting considerable savings. Some even go a step farther by trying to adjust formulas to take advantage of the low prices. So, what can be done?

Cereals are the primary source of energy in diets for poultry and pigs. In fact, they account for about 60-80 percent of total feed composition; something that constitutes energy is the most expensive element in any feed (invariably followed by protein and then phosphorus). So, when energy from cereals becomes cheaper, two things might be considered:

  1. Remove other ingredients that contribute towards dietary energy balance. These are lipid sources (lard, tallow, oils) and enzymes (specific for cereal polysaccharides). By reducing or removing these ingredients, dietary energy levels are expected to drop and, as a consequence, feed conversion rate will increase. But, that might be considered acceptable, as energy โ€” and feed as a whole โ€” cost is now much reduced. Keeping energy levels constant can be achieved in combination with the next approach.
  2. Reduce other ingredients that provide protein, allowing more formulation space for cereals. For example, and always depending on prices, it may better to remove DDGS (28 percent CP) and add back a smaller quantity of soybean mean (44 percent CP) and (or) feed-grade amino acids, allowing more cereals to fill in the gap of providing energy and perhaps some cheap(er) protein. Here a feed formulation program will make all necessary calculations and adjustments to find the least-cost scenario.

Even if nothing is done, feed prices should go down when cereal prices drop. Whether it pays off to change feed formulations depends on the economics of other ingredients in relation to cereals, and side parameters that have to do with desired productivity rate.

Closing, it is interesting to note that when cereal (or soybean meal) prices drop considerably; many consider it an opportune time to invest some of the feed savings towards testing certain additives that seemed too expensive previously. 

Page 1 of 25
Next Page