By Martin Clunies, PHD & Ken Vanderheyden
Grand Valley Fortifiers
Who would have thought that after the increase in grain and commodities prices to mid October of 2021, that they would continue to rise further? Certainly not us! In the interim grains and protein concentrates have risen another 34 to 40%. Back in October 2021 corn and Soybean meal was $254 and $513 respectively, now that looks like a great deal compared to the present cost of $395 and $715 respectively. Similarly, DDGS the next most popular alternative ingredient of most livestock diets has seen a 34% rise in price from $290 to $390 today. Also, the price of the amino acid, lysine has almost doubled during this time, while fat has also doubled albeit over the last 15 months. Thankfully, the price of hogs and cattle have also risen, as a result maximizing the performance and weight of each has been the objective of farmers. All these have increased the demand for high quality, performance diets to take advantage of these great livestock markets.
The question is where do we go from here? The war in the Ukraine has certainly had an impact on the rise in prices and will continue to impact our grain prices going forward. The Ukraine with its rich soils today accounts for 12.3 % of the world’s 2020 corn exports. In 2019, the Ukraine increased its corn production to 35.9 million metric tonnes, from 25 million in 2017. Exporting more than 20 million metric tonnes of corn in 2020, ranked the Ukraine 4th largest exporter behind United States, Brazil and Argentina in that order. The Ukraine accounts for 8% of the world’s wheat exports, ranked 5th behind Russia, United States of America, Canada and France. With the war, the planting of corn and wheat in the Ukraine are suspect to this point. In a world where supply and consumption are within 2-4 percentage points of each other, the disappearance of the Ukraine’s contribution to world grain exports could have a big impact on the future prices of corn and wheat. In retrospect, Russia accounts for 11.6% of world oil exports, yet look at the impact that sanctioning oil has had on the global energy market, all this from an industry that just has to open the taps a bit more for supply. With corn and wheat, we have to wait on the next growing season and the impact of weather and growing conditions on eventual yields. What I am suggesting is we tighten the seat belts, we may be going for a bit more of a wild ride, not being sure of how much that has been accounted for I think we may be partly there already.
So, what are the strategies going forward for economical minded livestock farmers? We assume that most producers grow the corn their birds, or livestock require, or a good proportion of that. As indicated previously, securing the protein supply has been the most pressing priority for livestock farmers. Maximizing the use of DDGS to the point the animals will tolerate should be the priority in most minds. DDGS almost always saves money, the limit to its use is the amounts birds or pigs will tolerate in their diets. Increasing Hi-Pro DDGS to 75 kg dietary inclusion has little difference in bird or pig performance. This will save 33 kg of soybean meal for a net savings of about $15/T of feed. Thereafter performance is reduced incrementally, though often the nutrient profile of the diet can be adjusted to retain performance until 150 kg of Hi-Pro DDGS included in poultry diets and 300 kg for pig diets. Including Hi-Pro DDGS at 150 kg saves 55 kg soybean meal and $28 per T of feed. At higher inclusions of DDGS, ingredients such as iso-leucine and valine are available at the right price to balance the diet correctly, when combined with the addition of a soluble carbohydrase enzyme this will further increased the bird’s/ pig’s ability to tolerate these high levels of DDGS in the formulations. While maximizing DDGS usually saves money by reducing the amount of soybean meal required in the diets, this will replace some of the corn in the diets, reducing the usage of corn. Depending on the farm’s corn inventory situation this may be desirable or not.
The other strategy is to reduce the use of expensive soybean meal by maximizing the use of synthetic amino acids. Looking on a combination of amino acids for poultry which includes methionine, lysine and threonine we can reduce the soybean meal by 45 kg, with a net savings of $14 /T of feed. If we combine this with DDGS then we can reduce soybean meal by 100 kg with very little difference of farm purchased ingredients.
The other strategy, which is a bit counterintuitive to most at this time, is to make the best feed possible for the best feed efficiency. Typically, with most formulations maximum output of eggs and body weight is the objective. To obtain the best efficiency requires including more nutrients in the feed and increasing resulting feed costs. With today’s high feed costs, investing in protein provides the best returns on investment (ROI). Attempting to improve feed efficiency by including fat/oil in the diet may not provide a return on the dollars invested, due to the high cost of the fat/oil choices.
If we are considering returns or savings from livestock operations, then manure is an important contributor to the farm. This year, manure from the pig barns may become the most valuable commodity on the farm, providing nitrogen and phosphorus for starting crops and optimizing output. Given time with more forewarning the manure could be optimized to provide more Nitrogen, Phosphorus and Potassium by selecting the ingredients used in the feeds. In this last year, we have seen some producers who elect to reduce the use of phytase in their feeds instead supplementing with more Mono-di-calcium phosphate to their formulations, preparing their manure for replacing high priced crop inputs.
The rising costs of grains and feed commodities, has livestock farmers looking for means to minimize their cost of production. Sourcing protein supply is the critical priority for farms making their own feed. We will have to make decisions based on supply, using what is available. DDGS is a viable alternative to Soybean meal. The amounts we can include in the diet are dependant on the pig’s ability to tolerate it. The combination of DDGS and amino acids offers the best opportunity to save feed dollars, in addition formulating to the optimum nutrition provides the best returns per kg of body weight.
This article was written for the Summer 2022 Swine Grist. To read the whole Swine Grist, click the button below.