The Costs of Nutrients and Comparison of Feedstuffs Prices

Dr. Normand St-Pierre, Extension Dairy Management Specialist, Department of Animal Sciences, The Ohio State University

Until the crops are in, feed markets will be highly reactive to Chinese buying rumors, dry or rainy spells, phases of the moon...  This is human nature, and in a year when we expect a very low stock-to-use ratio (i.e., small carry-over), then small changes in projected supply or demand can have disproportionate effects on feed prices.  The uncertainty might be hard to stomach until early fall.  Meanwhile, feeding balanced diets based on economically priced feed ingredients can help maintaining positive dairy margins.  The idea is to maximize the use of underpriced feeds and to minimize the use of overpriced ones.

Nutrient Prices

As usual in this column, I used the software SESAME™ that we developed at Ohio State to price the important nutrients in dairy rations to estimate break-even prices of all major commodities traded in Ohio and to identify feedstuffs that currently are significantly underpriced as of May 13, 2013.  Price estimates of net energy lactation (NEL, $/Mcal), metabolizable protein (MP, $/lb – MP is the sum of the digestible microbial protein and digestible rumen-undegradable protein of a feed), non-effective NDF (ne-NDF, $/lb), and effective NDF (e-NDF, $/lb) are reported in Table 1. Compared to its historical 6-year average of about 10¢/Mcal, NELsub> is still a highly priced nutrient at 18.9¢/Mcal.  This is important because a cow producing 70 lb/day of milk requires in the neighborhood of 33 Mcal/day of NEL.  Thus, you have to pay about 33 × $0.189 = $6.23/cow/day to supply the dietary energy required by a 70 lb/day cow.  For MP, its current price (27.2¢/lb) is just about its 6-year average (28¢/lb).  Thus, we are still currently in a period of very high dietary energy and moderate protein prices.  The cost of ne-NDF is currently discounted by the markets (i.e., feeds with a significant content of ne-NDF are price discounted), and the discount of 10.0¢/lb is close to its 6-year average (-9¢/lb).  Meanwhile, unit costs of e-NDF are also close to their historical average, being priced at 3¢/lb compared to the 6-year average of 3.3¢/lb.  So, dietary fiber, whether effective or not is currently not a significant cost factor from a historical standpoint.  Of course, this may depend on how bad your crops were affected by the drought last summer. 

Table 1.  Prices of dairy nutrients for Ohio dairy farms, mid-May 2013.
Figure 1 - NSP

Economic Value of Feeds

Results of the Sesame analysis for central Ohio in mid May are presented in Table 2. Detailed results for all 27 feed commodities are reported.  The lower and upper limits mark the 75% confidence range for the predicted (break-even) prices.  Feeds in the “Appraisal Set” were deemed outliers (completely out of price).  One must remember that Sesame compares all commodities at one point in time, mid May in this case.  Thus, the results do not imply that the bargain feeds are cheap on a historical basis.

Table 2.  Actual, breakeven (predicted) and 75% confidence limits of 27 feed commodities used on Ohio dairy farms, mid-May 2013.
Figure 2 NSP

For convenience, Table 3 summarizes the economic classification of feeds according to their outcome in the Sesame analysis.

Table 3. Partitioning of feedstuffs, Ohio, mid-May 2013.


At Breakeven


Bakery byproducts
Brewers grains, wet
Corn, ground, shelled
Corn silage
41% Cottonseed meal
Whole cottonseed
Distillers dried grains
Gluten feed
Gluten meal
Wheat middlings

Alfalfa hay – 40% NDF
Meat meal
Soybean meal – expeller
Wheat bran


Beet pulp
Blood meal
Canola meal
Citrus pulp
Feather meal
Fish meal
44% soybean meal
48% soybean meal
Roasted soybeans

As usual, I must remind the readers that these results do not mean that you can formulate a balanced diet using only feeds in the “bargains” column.  Feeds in the “bargains” column offer savings opportunity and their usage should be maximized within the limits of a properly balanced diet.  In addition, prices within a commodity type can vary considerably 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.  Also, there are reasons that a feed might be a very good fit in your feeding program while not appearing in the “bargains” column.