The livestock industry is experiencing revolutionary changes as typical feed ingredient prices have seemingly escalated daily. Higher corn price drives swine producers to look for alternative ingredients and feeding programs, which hopefully could maintain performance without increasing feed cost dramatically.

 

Corn price and breakeven hog price

Feed represents the majority of the total cost of livestock production. In North America and many other countries, corn is the primary energy ingredient in animal feeds and is considered to be the “energy currency of animal production.” For a wean-finish swine operation using typical corn-soybean meal (SBM) diets, it takes approximately 9.7 bushels of corn and 110 lb of 48% SBM to raise a hog to market weight (approximately 270 lb). A $1/bushel increase in the price of corn would raise the cost of producing hogs by about $10/head or about $4.00/cwt. With live hogs selling for a U.S. average price of $43/cwt in December 2006, the cost of production increase would be about 9% relative to the selling price. This calculation only considers the feed cost increase due to the price increase of corn and does not consider the feed cost increase associated with the price increase for other ingredients.  Prices of feed ingredients such as choice white grease and soybean meal will probably go up along with the corn prices. When corn price is $4.00/bushel and SBM price is $200/ton, breakeven prices for slaughter hogs should run about $53/cwt live or $70/cwt of carcass, based on the projections from ADM Alliance Nutrition’s ProFeed 5 program (Table 1).

 

Table 1. Breakeven selling prices ($/cwt live hog) with different corn-SBM price matrix (ANI ProFeed 5 projections)

		Corn, $/bushel
		$2.00	$2.50	$3.00	$3.50	$4.00	$4.50
SBM   $/ton	$180	45.11	46.96	48.82	50.67	52.52	54.38
	$190	45.33	47.19	49.04	50.90	52.75	54.60
	$200	45.56	47.41	49.27	51.12	52.98	54.83
	$210	45.78	47.64	49.49	51.35	53.20	55.06
	$220	46.01	47.86	49.72	51.57	53.43	55.28

 

Suggested nutritional strategies

Corn energy is primarily derived from its major component – starch. Higher corn price is driving the swine industry to come up with various low-starch feeding strategies to overcome the energy (starch) shortage associated with using less corn in swine diets. Following are a few suggested nutritional and management strategies to help alleviate the situations.

 

Utilization of byproducts in swine diets

When corn price is high, the use of co-products may offer a viable solution to minimize the increase in feed cost. Common byproducts are corn distiller dried grain with solubles (DDGS), corn germ meal, corn gluten feed, corn gluten meal, wheat midds, soyhulls, bakery byproducts, corn steep liquor, vegetable oil residue, and soapstock. When these ingredients are considered for inclusion in swine diets, evaluate whether they are economical based on cost per unit of energy content rather than per pound of the ingredient. Proper maximal constraints should be placed to avoid potential negative effects on growth performance, carcass traits, and environment. Fiber content is relatively high in many byproducts, which limit how much they can be used in swine diets, because swine have limited capacity to digest fiber, and fiber may negatively affect utilization of other nutrients in the diets. Dietary energy density and energy:lysine ratios should be closely monitored as more byproducts and less corn are used in diets.  In addition, when some byproducts are used in swine diets product consistency and mycotoxin content should also be considered. ADM Alliance Nutrition is conducting swine research to more precisely determine how to best use these byproducts to partially replace corn in swine diets.

Glycerin is a coproduct from biodiesel production. Its supply will greatly increase as more biodiesel plants are built in the US. Crude glycerin has an energy value similar to corn. Its utilization in livestock feeds is subject to regulatory guidelines on methanol. According to FDA guidelines, crude glycerin with a methanol content over 150 ppm can not be fed to livestock in the US. Most crude glycerin available in the US market may contain over 150 ppm methanol and thus should not be used in swine diets.

 

Utilization of other grains

Wheat, barley, sorghum, and oats are alternative grains to consider when corn price is high. These grains are not common in Midwest states, but may be more available in some other locations in the US and other countries. Compared to corn, relative feeding values are 105 to 107%, 90 to 95%, 96%, and 70 to 80% for wheat, barley, sorghum (milo) and oats, respectively.

 

Feeding pelleted diets

Numerous swine research studies have shown that pelleting improves feed efficiency of grow-finish pigs approximately 6% through reduced feed wastage. If one assumes a feed efficiency of 3.0 for pigs from 50 to 270 lb, improvement of 6% feed efficiency means it takes 39.6 lb less feed to gain 220 lb weight. Feeding 39.6 lb less feed is equivalent to reducing feed cost from $2.86 to $4.01/head, as corn prices increase from $3.00 to $5.00/bushel (Table 2). Therefore, it appears feeding pelleted diets should help reduce feed cost for most swine producers when corn price is over $3.00/bushel. Also, for some alternate ingredients, pelleting may allow for higher inclusion of these ingredients due to the change in physical form and flowability of the finished feed.  It is suggested that producers conduct an on-farm analysis based on the actual ingredient and pelleting cost and feed efficiency improvement before a decision is made to feed pelleted diets.

 

Table 2. Economical analysis based on 6% feed efficiency improvement from pelleting,
various corn and pelleting costs
	Corn price, $/bushel
	$3.00		$3.50		$4.00		$4.50		$5.00
Meal feed consumed, lb/head	660		660		660		660		660
Feed cost, $/lb feed	0.072		0.080		0.087		0.094		0.101
Feed cost, $/cwt live hog	21.68		23.87		26.05		28.23		30.41
Pellet feed consumed, lb/head	620.4		620.4		620.4		620.4		620.4
Pellet feed saved, lb/head	39.6		39.6		39.6		39.6		39.6
Feed savings, $/head	2.86		3.15		3.44		3.73		4.01
# pigs fed/ton feed	3.03		3.03		3.03		3.03		3.03
Relative savings, $/ton feed	8.67		9.55		10.42		11.29		12.16
Potential savings from pelleting, $/ton
Pelleting cost, $/ton
$7.00	$1.67		$2.55		$3.42		$4.29		$5.16
$8.00	$0.67		$1.55		$2.42		$3.29		$4.16
$9.00	-$0.33		$0.55		$1.42		$2.29		$3.16
Feed cost derived from ProFeed 5 projections, based on 3.0 feed efficiency and SBM $200/ton for pigs to gain 220 lb.

 

 

Particle size

Reducing particle size of the diet improves feed efficiency because smaller particle size has more surface areas for digestive enzymes to access feed particles, enabling pigs to improve growth performance when consuming similar amounts of feed. Fineness of grind is limited by flowability and energy cost of grinding in the feed system. Reducing particle size of grow-finish diets from 700 to 600 microns is worth about $0.60/pig with current corn prices. Swine producers need a roller mill to reduce grain fineness to that level (600 microns) and still have acceptable flowability. A word of caution: too small of particle size has been associated with stomach ulcers.

 

Market weight

Feed efficiency decreases as pigs get older. The poorest feed efficiency occurs in the last phase before market. As a result, it has been suggested that pig slaughter weight should be reduced when corn price is higher, in an attempt to avoid the decreased feed efficiency for heavy pigs. Data from ProFeed 5 is again used to determine whether a lighter market weight is beneficial when corn price is high (Table 3). Current average slaughter weight in the US is about 270 lb. Thus, three 10-lb weight gains (250 to 260, 260 to 270, and 270 to 280 lb), three corn prices ($3.00, $4.00, and $5.00/bushel) and two cash hog prices ($40.00 vs. $45.00/cwt live) were compared. When corn price is $3.00 or $4.00/bushel, market weight should not be reduced, even if live hog price is as low as $40/cwt. When corn price is $5.00/bushel and live hog price is about $45/cwt, market weight still should not be reduced. However, when corn price is $5.00/bushel and live hog price is $40/cwt, market weight should be below 250 lb. The analysis did not consider possible premium discounts and sort loss associated with lighter market weight.  Based on these calculations, it is suggested that swine producers continue to sell as heavy hog as packer windows will allow. Hogs should not be sold at lighter weights unless the corn price is extremely high and hog selling price is extremely low. 

 

Table 3. Effect of market weight on economical returns at three corn prices
 

		$3.00/bushel corn			$4.00/bushel corn			$5.00/bushel corn
$/ton diet		$135	$135	$135	$165	$165	$165	$195	$195	$195
Hog weight, lb		250	260	270	250	260	270	250	260	270
Hog sell wt, lb		260	270	280	260	270	280	260	270	280
ADG, lb		1.85	1.85	1.85	1.85	1.85	1.85	1.85	1.85	1.85
Feed Efficiency		3.7	3.8	3.8	3.7	3.8	3.8	3.7	3.8	3.8
Body wt gain, lb		10	10	10	10	10	10	10	10	10
Days on feed		5.41	5.41	5.41	5.41	5.41	5.41	5.41	5.41	5.41
Feed/10 lb gain		37.00	38.00	38.00	37.00	38.00	38.00	37.00	38.00	38.00
Feed cost $/pig		$2.51	$2.57	$2.57	$3.06	$3.14	$3.14	$3.61	$3.71	$3.71
Facility ($0.10/d)		$0.54	$0.54	$0.54	$0.54	$0.54	$0.54	$0.54	$0.54	$0.54
Partial cost $/hog		$3.05	$3.11	$3.11	$3.60	$3.68	$3.68	$4.15	$4.25	$4.25
Cash $/live wt ($45/cwt)		$4.50	$4.50	$4.50	$4.50	$4.50	$4.50	$4.50	$4.50	$4.50
Difference ($/hog)		$1.45	$1.39	$1.39	$0.90	$0.82	$0.82	$0.35	$0.25	$0.25
Cash $/live wt ($40/cwt)		$4.00	$4.00	$4.00	$4.00	$4.00	$4.00	$4.00	$4.00	$4.00
Difference ($/hog)		$0.95	$0.89	$0.89	$0.40	$0.32	$0.32	-$0.15	-$0.25	-$0.25

 

 

Liquid feeding

Liquid feeding is used more widely in European swine operations than in North America. As the drying cost of liquid ingredients increases, liquid feeding may be an option to save production cost for some swine producers, who are close to the liquid byproduct plants. Wet distiller grains and condensed distiller solubles from ethanol plants and corn steep liquor from wet milling industry are potential ingredients for swine liquid feeding. In addition, vegetable oil residue, crude glycerin and other liquid ingredients can also be considered. The US swine industry is starting to consider liquid feeding system as swine nutritionists begin to have a better understanding of how to feed liquid feeds to swine.

 

Summary

With higher corn prices, swine producers should consider alternate ingredients to feed swine. Lower starch-higher fiber diets will replace some traditional corn-soybean meal swine diets. Alternate ingredients, new feed additives, feeding practices and management changes such as better feeder adjustment should help sustain swine production in the US.

 

For additional information E-mail: AN_SwineHelp@adm.com
Or call ADM Alliance Nutrition Inc, Customer Service 866-666-7626