Dr. Normand St-Pierre, Dairy Management Specialist, The Ohio State University.
At the time of this writing, fears of a drought in the Eastern corn belt are accentuating, bringing the usual wild market speculations in the process. Weather will be the prime determinant of the corn and soybean markets in the next few months. Other feeds should follow more or less in sympathy. Thus, the results presented in this column could change very quickly in weeks ahead.
Using SesameTM (available at www.sesamesoft.com), implicit market prices of nutrients were calculated using market prices of 29 commodities in central Ohio (Table 1). Net energy lactation is currently at a record price, approaching $0.15/Mcal compared to a 10 year average of about $0.07/Mcal. Presently, feed energy is the predominant factor driving the price of commodities. On the other hand, both degradable and undegradable protein are currently priced at much discounted prices. Non-effective NDF (a major feature of byproducts) is also heavily discounted, whereas effective NDF (a major feature of forages) is about at its historical average. Thus, dietary energy is currently very expansive whereas protein and fiber are not. This should impact the nutritional strategy used by nutritionists when balancing dairy rations.
Table 1. Prices of nutrients, central Ohio.
Nutrient name |
May 2006
|
March 2007
|
July 2007
|
Net energy for lactation - 3X (NRC, 2001; $/Mcal) |
0.072
|
0.117
|
0.148
|
Rumen degradable protein ($/lb) |
-0.013
|
-0.069
|
-0.163
|
Digestible-rumen undegradable protein ($/lb) |
0.200
|
0.206
|
0.169
|
Non-effective neutral detergent fiber (NDF; $/lb) |
-0.027
|
-0.046
|
-0.095
|
Effective-NDF ($/lb) |
0.065
|
0.033
|
0.044
|
In Tables 2 and 3, we report the results for 27 feed commodities traded or available in central Ohio. Most people think that corn grain at $3.95/bu is highly priced. Certainly, this is a high price by historical standards, but corn is currently a bargain when compared to all other feed sources. Most other commodities are being traded at prices well above their historical averages. I remember when tallow at $0.15/lb ($300/ton) was considered expensive. Now you can't find tallow under $0.30/lb. We live in a new era, a new "feed world".
Table 2. Grouping of feed commodities, central Ohio, November 2006.
Bargains
|
At Breakeven
|
Overpriced
|
Bakery byproduct | Alfalfa hay - 44% NDF | Beet pulp |
Corn grain | Cottonseed meal | Brewers grains |
Corn silage | Whole cottonseed | Canola meal |
Distillers dried grains | Gluten meal | Citrus pulp |
Feather meal | Molasses | Meat meal |
Gluten feed | 48% Soybean meal | Soybean hulls |
Hominy | Roasted soybeans | 44% Soybean meal |
Expeller soybean meal |
Tallow | |
Wheat middlings | Wheat bran |
Table 3. Commodity assessment, central Ohio, July 2007.
Name |
Actual ($/ton)
|
Predicted ($/ton)
|
Lower limit ($/ton)
|
Upper limit ($/ton)
|
Alfalfa Hay, 44% NDF, 20% CP |
140
|
132.26
|
105.90
|
158.61
|
Bakery Byproduct Meal |
185
|
210.53
|
197.36
|
223.71
|
Beet Sugar Pulp, dried |
200
|
146.06
|
125.45
|
166.67
|
Brewers Grains, wet |
39
|
29.07
|
24.71
|
33.42
|
Canola Meal, mech. extracted |
191.60
|
138.59
|
121.94
|
155.24
|
Citrus Pulp, dried |
214
|
173.30
|
162.35
|
184.26
|
Corn Grain, ground dry |
151
|
219.72
|
207.46
|
231.98
|
Corn Silage, 32 to 38% DM |
50
|
65.44
|
56.27
|
74.61
|
Cottonseed Meal, 41% CP |
185
|
174.52
|
160.22
|
188.81
|
Cottonseed, whole w lint |
220
|
234.37
|
200.51
|
268.23
|
Distillers Dried Grains, w solubles |
116
|
170.27
|
153.46
|
187.09
|
Feather Hydrolyzed Meal |
260
|
295.90
|
269.43
|
322.37
|
Gluten Feed, dry |
104
|
149.39
|
136.67
|
162.10
|
Gluten Meal, dry |
383
|
351.54
|
317.20
|
385.88
|
Hominy |
140
|
178.92
|
167.73
|
190.11
|
Meat Meal, rendered |
285
|
255.33
|
232.91
|
277.75
|
Molasses, sugarcane |
154
|
161.13
|
150.65
|
171.61
|
Soybean Hulls |
115
|
68.17
|
38.40
|
95.95
|
Soybean Meal, expellers |
275.10
|
309.56
|
286.61
|
332.51
|
Soybean Meal, solvent 44% CP |
235.10
|
192.29
|
169.91
|
214.68
|
Soybean Meal, solvent 48% CP |
244.10
|
228.78
|
209.31
|
248.25
|
Soybean Seeds, whole roasted |
299
|
317.32
|
297.73
|
336.92
|
Tallow |
645
|
607.14
|
565.89
|
648.39
|
Wheat Bran |
77
|
91.06
|
71.18
|
110.94
|
Wheat Middlings |
70
|
111.29
|
111.29
|
93.96
|
Appraisal Set
|
|||
Name |
Actual ($/ton)
|
Predicted ($/ton)
|
Corrected ($/ton)
|
Alfalfa Hay - 38% NDF, 22% CP |
160
|
133.88
|
163.62
|
Alfalfa Hay - 48% NDF, 17% CP |
130
|
133.77
|
113.76
|
Blood meal, ring dried |
745
|
399.55
|
|
Fish Menhaden Meal, mech. |
970
|
340.38
|
|
Nutrient prices and milk components prices can be used to calculate a benchmark for feed costs (nutrient costs, really) and income over nutrient costs. Results are presented in Table 4. The cost of feeding for a milk yield of 75 lb/day has gone up $0.40/cow/day since last March and is $1.24/cow/day greater than it was in May 2006. Improvements in milk prices, however, more than compensate for the increase in feed costs. The income over nutrient cost is currently $5.93 and $3.65/cow/day greater than it was in May 2006 and last March, respectively. At $10.75/cow/day, income over nutrient costs far exceeds its historical average of $6.25 to 6.50. These are good times for dairy producers. These good times should make up for the bad ones, such as those we went through for most of 2006.
Table 4. Nutrient costs and income over nutrient costs, central Ohio.1
Nutrient |
May 2006
|
March 2007
|
July 2007
|
------------------------------ $/cow/day --------------------------------
|
|||
Nutrient costs2 |
|
|
|
|
2.49
|
4.05
|
5.13
|
|
(0.07)
|
(0.37)
|
(0.86)
|
|
0.45
|
0.47
|
0.38
|
|
(0.13)
|
(0.21)
|
(0.44)
|
|
0.71
|
0.36
|
0.48
|
|
0.20
|
0.20
|
0.20
|
|
3.65
|
4.49
|
4.89
|
Milk gross income |
|
|
|
|
3.33
|
3.69
|
4.44
|
|
4.47
|
5.62
|
8.62
|
|
0.67
|
2.28
|
2.58
|
|
8.47
|
11.59
|
15.64
|
|
|
|
|
Income over nutrient costs |
4.82
|
7.10
|
10.75
|
1Costs and income for a 1400 lb cow producing 75 lb/day of milk, with 3.6% fat, 3.1% protein, and 5.9% other solids. Component prices are for Federal Order 33, October 2006.
2NEL = Net energy for lactation, RDP = rumen degradable protein, RUP = rumen undegradable protein, ne-NDF = noneffective neutral detergent fiber, and e-NDF = effective neutral effective fiber.