Cost of Nutrients, Relative Value of Feedstuffs Pa. Dairy Farms

5/18/2013 7:00 AM

2 tables saved a jpegs in FotoStation (word doc also emailed to April



Dr. Ken Griswold

Technical Service Manager

Kemin Animal Nutrition & Health

Dr. Joanne Knapp

Fox Hollow Consulting, LLC

Columbus, OH

Dr. Normand St-Pierre

Dairy Management Specialist

The Ohio State University

T he cold and precipitation, whether snow or rain, in the Midwest has delayed corn planting considerably and made the corn market ever more volatile.

The soybean market, however, is still holding firm as ending stock levels continue to dwindle.

The milk price futures are looking favorable through the summer, which may help income over feed cost (IOFC) in most dairy operations.

The challenge still remains to find cost-effective feedstuffs in the ever-changing market. To help in finding those opportunities, we have, in collaboration with The Ohio State University, utilized the SESAME program to analyze current market conditions and determine potential cost-effective ingredient options within the market.

The SESAME software evaluates commonly used feedstuffs based on their content of five basic nutrients: net energy for lactation (NEL), rumen degradable protein (RDP), digestible rumen undegradable protein (d-RUP), non-effective neutral detergent fiber (ne-NDF), and effective neutral detergent fiber (e-NDF).

These individual nutrients are valued on a Mcal basis for NEL and a per pound basis for RDP, d-RUP, ne-NDF, and e-NDF.

If you are evaluating your ration ingredients based on other nutrients, please be aware of the differences and consult with your nutritionist on any potential ration changes.

The SESAME analysis of the Pennsylvania feed market uses 29 commonly fed commodities to determine the intrinsic value for each of the five basic nutrients in a feeding program. The intrinsic value is the price that the market is willing to pay for that particular nutrient.

As an example, a Mcal (megacalorie) of energy is currently worth approximately $0.145 (or 14.5 cents per Mcal) in the market, regardless of whether that energy comes from corn, cottonseed, bakery meal, fat, etc.

So, if a high-producing Holstein cow needs roughly 42 Mcal to produce 100 pounds of milk, then the value of the energy in her daily diet would be approximately $6.09 based on the current market value for NEL. This value is $0.21 per cow per day less than last month, and shows how quickly diet costs can change given the influence of corn on the energy value in the diet.

Given the intrinsic value for each of the five nutrients within a specific feedstuff, we can determine the potential break-even price based on the book values for each nutrient in that feedstuff.

For the current SESAME analysis representing market prices from the end of April 2013, we excluded four commodities — blood meal, feather meal, fish Menhaden meal and tallow (fat) — because their current market prices are so high that they were considered outliers that would skew any results from the program.

This is the first time in this column’s history where the prices for these three major animal source protein feedstuffs have been outliers, and suggests that animal-based protein sources are beginning to price themselves out of the market.

The values of energy and digestible RUP remained constant from February to March. However, the value of effective fiber (e-NDF) dropped to almost zero. The calculated costs for the five basic nutrients are shown in Table 1.

Table 2 provides the actual prices for the feedstuffs that were evaluated in the current SESAME analysis along with their predicted prices based on nutrient content.

In addition, the table includes the 75 percent confidence limits of prices for each commodity. A 75 percent confidence limit indicates that we are about 75 percent sure that the true cost of the feedstuff based on nutrient content is between the lower and upper limit prices.

In reading the table, one should consider feedstuffs with an actual price below the lower limit as bargains in the present market. The feedstuffs with an actual price above the upper limit would be considered overpriced, and feedstuffs with actual prices falling between the limits would be priced at their approximate nutrient value.

Due to the volatility in the markets, the number of bargain feedstuffs to be had in Table 2 has dwindled. Only four feedstuffs — bakery by-product meal, cottonseed meal 41 percent, distillers dried grains with soluble, and gluten feed — are at or below the lower limit on expected price.

With the price spread between canola meal and soybean meal 48 percent well below $100 per ton, soybean meal 48 percent remains the main choice for RDP in formulated diets.

Avoid citrus pulp, tallow, blood meal, feather meal and fishmeal as they continue to be overpriced in the market.

Given the extremely high price of animal-based RUP sources such as bloodmeal, feather meal, and fishmeal, rumen-protected amino acid supplements may be more cost effective for balancing for amino acids within a lactating cow diet.

However, because the prices used in the SESAME analysis are aggregated, approximate feed prices, the local prices for all feeds maybe different than those listed in Table 2. There are several warnings about the information presented in Table 2.


1. Actual Prices listed in Table 2 are approximate and represent aggregated prices for the State of Pennsylvania. Check with your local suppliers for actual delivered prices.

2. Prices are on a commodity basis, and represent farm-delivered, full tractor-trailer loads (TTL) prices. No services are included; commodity feeds have little or no nutritional guarantees.

3. Results do not imply that a balanced ration can be made solely with bargain feeds, or that over-priced feeds should be eliminated from the ration. Certainly, there is an economic incentive to maximize the use of bargain feeds and minimize the use of over-priced feeds.

4. The analysis is based on the five most economically important nutrients in dairy rations. For very high production herds, other nutrients such as amino acid content of the undegradable protein should also be considered. This would change the predicted price of some commodities such as blood meal.

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