Recommended Adjustment when Pricing Forages

Dr. Bill Weiss, Professor, Department of Animal Sciences, The Ohio State University and Dr. Alex Tebbe, Former PhD student (currently Dairy Consultant for Purina Animal Nutrition)

For several years, an article on cost of nutrients has appeared in this newsletter (currently written by April Frye White). The information in that article is based on a nutrient pricing method developed by a former colleague, Dr. Normand St-Pierre. The method is based on a statistical procedure that relates prices of several feeds to their nutrient composition. In articles appearing in Buckeye Dairy News, the prices are from central Ohio and the nutrients are NE_L, metabolizable protein (MP), effective NDF and non-effective NDF. The underlying assumption of that method is that cows require nutrients, not feeds and diets with the same nutrient composition, regardless of ingredients that will have the same effect on cows. This statement is not entirely true and can be very wrong when it comes to forages because of the effect ‘forage quality’ has on dry matter intake. To overcome that issue, several years ago we developed a quality adjustment based on NDF concentration and applied it to alfalfa hay. If you look at the nutrient pricing article in the second part of Table 2, you will see ‘Corrected’ values for alfalfa hays with different NDF concentrations. If NDF is less than 44%, the corrected value is greater than the predicted value and if NDF is more than 44%, the corrected value is less. We did this to account for the negative effect that high concentrations of NDF has on intake and subsequent milk production.

Using NDF to adjust for forage quality does not account for all the effects forage quality has on intake and milk production and does not work for corn silage. For the past few years, we have been working on improving the adjustment for forage quality and have recently developed an adjustment based on in vitro NDF digestibility (IVNDFD). This adjustment should work for legumes, grasses, mixtures, and corn silage. The basic procedure is you first calculate the price of the forage based on nutrient prices:

(Mcal of NE_L/ton x $/Mcal) + (lb of MP/ton x $/lb of MP) + (lb of NDF/ton x $/lb of effective NDF)

Note: For forages, all NDF is assumed to be effective.

Current nutrient prices can be found in the article on nutrient prices. The nutrient value is then adjusted up or down using its relative IVNDFD. Based on a relationship first published by Michigan State University, increasing IVNDFD 1 percentage unit is expected to increase DMI by about 0.26 lb/day and fat-corrected milk by 0.5 lb/day. The economic value of that change depends on feed and milk prices (i.e., an increase in IVNDFD is more valuable when milk is expensive and feed is cheap and less valuable when feed is expensive and milk is cheap). We developed factors to adjust forage price based on milk and feed prices (see Table 1). The IVNDFD correction is based on change, not on the absolute number. Therefore, you need to compare the sample IVNDFD you obtained from a lab to a standard. At this time, we are using the lab mean as the standard. You should be able to obtain mean values from the lab you are using. The mean must be for the specific forage you are using (e.g., corn silage, legume forage, or grass forage) and ideally from the same lab that you used to assay your sample. It does not matter whether you use 30- or 48-hour IVNDFD, but the mean and your assayed value must be from the same time point. After you get both numbers (lab mean and sample value), calculate the difference (Sample – mean). Then pick the appropriate number from Table 1 based on current milk and feed prices, and multiple by the difference. The number can be positive or negative. The resulting value is the quality adjustment per ton of dry matter for the forage.

As an example, you have a corn silage sample with 35% NDF, 4.6% MP (for forages, MP = 0.57 x CP) and 0.66 Mcal NE_L/lb. Using nutrient prices published in this edition of Buckeye Dairy News ($0.13/Mcal NE_L, $0.33/lb MP, and $0.056/lb eNDF), the predicted nutrient value of that silage is $241/ton of DM or $84/ton as-fed at 35% DM. If your silage had an IVNDFD (30 hours) of 49% and the lab average IVNDFD (30 hours) is 53%, then the difference is -4. Assuming a milk price of $17/cwt and feed DM price of $10/cwt, the adjustment factor (Table 1) is 5.4. Multiple 5.4 by -4, obtaining -$21.6/ton of DM. After adjusting for expected production differences, the corn silage would be worth $219/ton of DM ($241/ton - $22/ton) or $77/ton as-fed at 35% DM. The procedure is the same for all forages.

Table 1. Quality adjustment factors ($/ton of DM) for forages based on IVNDFD.¹

¹ To obtain quality adjustment, calculate the difference between your sample IVNDFD and lab average and multiply that value by the appropriate number in the table. The resulting number is added (or subtracted) from the nutrient value of the forage. A limitation of this method is that it assumes cows are fed 20 lb of DM of the forage (this was about the mean inclusion rate from the Michigan State work). However, at low inclusion rates, our method may over value the effect of forage quality.