The Good News: Feed Costs Have Declined Over the Past Year

 

We’ve been tracking the cost of nutrients over the past three years, based on the estimates obtained from SesameIII predictions.  Since last fall, the average cost of nutrients to feed a cow producing 75 lb/day of milk has decreased 70¢/day (Figure 1).  Energy prices have declined by more than 50%, but some of this has been counter-balanced by the large increases in protein prices.  Currently, it costs more to deliver metabolizable protein (MP) to the cow than energy (Figure 1). 

 
Knapp Figure 1

Figure 1.  Predicted nutrient costs to feed a 1500 lb Holstein cow producing 75 lbs/day of milk with 3.80% fat and 3.10% true protein.  While the cost of energy has decreased over the past year, the cost of metabolizable protein has increased by more than 50%.

While some of this increased MP cost is derived from RDP (rumen degradable protein), the price of digestible RUP (dRUP; RUP = rumen undegradable protein) makes a larger contribution (Table 1).  Work with your nutritionist or feed company representative to ensure that you’re getting the best quality (highly digestible and consistent) ingredients to provide RUP in your rations.

Date

Jul-08

Sep-08

Nov-08

Jan-09

Mar-09

Apr-09

Jun-09

Aug-09

Oct-09

 

Average

RDP ($/lb)

0.255

0.133

0.011

0.100

0.055

0.112

0.128

0.235

0.175

 

0.113

dRUP ($/lb)

0.336

0.307

0.315

0.372

0.479

0.334

0.590

0.485

0.450

 

0.390

Table 1.  Estimated price of protein fractions in 2008 and 2009.

The cost of the key nutrients was estimated using SesameIII software and break-even prices of commodities and forages used in dairy rations were predicted (Table 2).  Net Energy of Lactation (NEl) is estimated at 4.8¢/Mcal, which is substantially lower than what we’ve seen during the past three years.  Metabolizable Protein (MP) at 61¢/lb is the highest we’ve seen historically.  The prices of corn gluten meal and hydrolyzed feather meal are heavily impacting this value, while blood meal currently is a good value in providing digestible RUP.  Non-effective neutral detergent fiber (neNDF) and effective NDF (eNDF) are –6.9 and 5.3¢/lb, respectively, well within their normal ranges.  It is common for neNDF to be negative, as feeds that have high levels of this nutrient, such as by-products like distillers’ grains, corn gluten feed, etc., are discounted in the market relative to other feeds.  Good- to high-quality, home-grown forages continue to be an excellent and inexpensive source of effective NDF.

Based on mid October wholesale prices for central Ohio, feed commodities fall into three groups:

Bargains

At Breakeven %

Overpriced

Brewers’ grains, wet
Corn grain, ground
Corn silage
Distillers’ grains w/sol
Expeller SBM
Gluten feed
Meat and bone meal
Wheat midds

Alfalfa hay 44NDF 20% CP
Bakery byproduct
Blood meal
Cottonseed, whole
Feather meal
Gluten meal
Hominy
Soybeans, whole
Soybean meal, 48% CP
Wheat bran

Canola meal
Cottonseed meal, 41% CP
Fish meal
Molasses
Soybean meal, 44% CP
Soyhulls
Tallow

The usual caveats with SesameIII™ results apply.  You cannot formulate a balanced diet using only the feeds in the Bargains column.  These feeds represent savings opportunities and can be utilized in rations to reduce feed costs within limitations for providing a balanced nutrient supply to the dairy cow.  Prices for commodities can vary because of quality differences as well as non-nutritional value added by some suppliers in the form of nutritional services, blending, terms of credit, etc.  Feeds may also bring value to a ration in addition to their nutrient value, e.g. tallow as a “carrier” and dust suppressant in vitamin/mineral pre-mixes and molasses as a source of sugars. 

The detailed results of the SesameIII™ analysis are given in Table 2.  The lower and upper limits give the 75% confidence range for the predicted Break-Even prices.  Feeds in the “Appraisal Set” are either those that were completely out of price range (outliers) or had unknown prices, such as the alfalfa hays of different nutritional quality. 



Table 2

Table 2.  Prices of dairy nutrients, and actual wholesale, breakeven (predicted) and 75% confidence limits for feed commodities used on Ohio dairy farms.

While feed costs are down and this will help improve income-over-feed costs, producers will still want to work closely with their nutritionists and feed sales representatives to control feed costs and maximize income over feed costs.