Planning for winter feed needs
July 11, 2008
It’s an obvious understatement to say these are interesting times in agriculture. The new biofuel demands and their influence on the economics of ag production have created a new playing field that has brought increased input costs, volatility in markets, and uncertainty about what to expect next.
Many of us that take turns writing for this weekly column have focused in recent weeks on issues related to unprecedented rises in input costs for cattle producers, particularly feed costs. Unfortunately, there is no magic that will suddenly provide opportunities to reduce feed costs. Instead, we need to focus on ensuring that we maximize the value that is gained from the investment in feedstuffs that are produced or purchased to support the cattle enterprise. In recent columns, we have focused on getting the greatest value from grazed and harvested forages for the dollar invested in producing them on the farm or ranch.
Today, I would like to focus on considerations for buying the best nutritional value in purchased feedstuffs, such as supplements. Even though we are busy with summer tasks, now is the time to start thinking about and planning for feedstuff needs for this coming winter, such as supplements for cows or weaned calves that will be grazing crop residues or dormant rangeland.
First, it’s important to buy feeds that are high in the most limiting nutrients for the production situation. In the case of supplements for cattle grazing low quality forages like crop residues and dormant rangeland, the first limiting nutrient is protein. Energy is potentially limiting, but is available for ruminants from the high-fiber content of these types of forages. Ruminal fermentation (digestion) of this fiber to extract its energy value is dependent on adequate crude protein that can be utilized by the rumen microbes.
As costs escalate for traditional protein supplements, some wise shopping should provide the opportunity to find alternatives that may provide a cheaper source of protein. When considering alternatives, such as various coproducts of biofuel production, particularly various wet, dry, and modified distillers grains, one needs to be careful that prices are converted to an equal basis to make fair comparisons. This involves converting to a dry matter basis to adjust for differences in moisture content, and to adjust to a price per unit of the desired nutrient (protein in this case) basis.
For example, a traditional 20 percent crude protein range cake might be priced at $250 per ton. An alternative might be to consider dried distillers grains that typically contain around 28 percent crude protein and are priced at $160 per ton. If we assume that both of these feeds have 90 percent dry matter, the cost per ton of protein is $1,389 and $635 for cake and dried distillers grains, respectively.
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On this basis, the distillers grains look like the best alternative. However, one also has to consider delivery costs. If the cost for the range cake is at the local feed store and the distillers grains has to be delivered from an ethanol plant that is several hundred miles away, then delivery costs at current diesel prices can add substantially to the cost of the delivered product. In this example, the distillers grain may or may not be the bargain feedstuff once delivery costs are factored in. Another consideration when looking at the delivery cost of alternatives is the moisture content. While the price of wet distillers grains are substantially cheaper than dried, the cost of delivering the high water content precludes their use on a price-effective basis at distances that are very far from the ethanol plant.
Finally, availability of given feedstuffs as they are needed should be considered. Use of ethanol coproducts increases in the winter months, and therefore their demand sometimes exceeds the supply. Not only does this mean that they may not be available on the market when needed during the winter, but prices follow demand and they are typically more costly then. Thus, preplanning now and purchase during the summer or early fall based on projected needs may mean cost savings because of seasonally lower prices and assurance that the product will be there when you need it.
The bottom line for your bottom line may depend on preplanning for this coming winter despite how difficult it is to think about winter conditions in the heat of summer activities.
Email Ken Olson at email@example.com