How to deal with high cereal prices in 12 steps

30-12-2010 | |
How to deal with high cereal prices in 12 steps

At least 60% of the cost of raising pigs is made up of feed costs. With higher feed prices, it makes sense to pay more attention to feed efficiency. Here are 12 ways to positively influence the feed/ gain ratio.

By Dr Ioannis Mavromichalis, Ariston Nutrition, Madrid, Spain

High cereal prices are here to remain. According to Rabobank cereal prices are going to remain high, with occasional regional reductions, for quite sometime. In the worst case scenario, predictions are for cereals to remain expensive even until 2015 and beyond, or at least, until fuels stop competing against humans and animals for food and feed energy. Certainly, natural disasters such as drought and fires will not help in the direction of reducing cereal prices worldwide. So, after accepting we have to deal with high cereal prices in animal feed, what is left to do?
  Feed cost used to make up at least 60% of the cost of raising a pig. Now, it is even higher. So, to start with, the general idea is to improve the feed to gain ratio, or feed efficiency. Anything that reduces the amount of feed required per unit of weight gain also reduces feed cost per unit of gain. It just makes cents! For your consideration, below are some recommendations regarding non-nutritional and nutritional strategies to control, if not lower, feed cost.

1. Purchasing
It is a business axiom: If producers want lower prices they have to buy more or buy for a longer period of time. It makes sense to assume that increasing purchasing power (either increasing the volume per transaction or the duration of a purchasing contract), lowers prices per unit of weight. Back in 2004, when these troubles were just surfacing, several producers had already made ten-year contracts with cereal producers to lock in prices ahead of the forthcoming crisis. Apparently, these producers were right.

2. Pig market weight
It is also well known that when feed is expensive, pigs should get to the market sooner. Pigs tend to deposit more and more fat after their protein deposition potential peaks. This adversely affects the feed/ gain ratio, meaning that weight gained late in life is not as efficiently gained as weight earlier on. This is just a matter of fact due to the greater energy required to deposit one gramme of fat compared to one gramme of lean tissue. To find the optimal market weight the advice of a qualified nutritionist can be of tremendous value, but on average, feed/ gain starts declining rapidly after about 80-90 kg body weight.

3. Leaner genetics
Through the same mechanism of depositing less fat, as described above, leaner genetics can offer substantial feed cost savings. Leaner pigs cost less to produce and this solution might be as easy as switching the genetic make up of your terminal sire semen supply.

4. Feed wastage
It is estimated that at least 5% and as much as 25% of feed is usually wasted through poor management of feeders. Now is a golden opportunity to resolve this chronic issue by training personnel, fixing feeders, and reallocating feeders. Each percentage unit wastage is reduced is a percentage unit savings in feed/ gain ratio. Most farms don’t even realise the extent of wastage until it is actually measured.

5. Animal health
It is no secret, healthy pigs grow leaner and more efficiently compared with pigs of suboptimal health. Malnutrition early in life is also ‘compensated’ by depositing more fat and organ tissue later when nutrition becomes normal again. So, it pays to keep the animals healthy and thrifty. A good start also ensures profitable feed/ gain later on in life.

6. Additives and ROI
This is quite easy to accomplish with the help of a qualified nutritionist as the amount of information available in the market has reached imponderable proportions. Additives should be evaluated based on return-on-investment (ROI). Usually, additives that improve growth below 4-5% are difficult to justify during hard times. It is necessary to cast a critical eye on additives and to question whether they really are worth the expense and trouble. Only the ones that really work should be used.

7. Feed particle size
It has been determined by pioneering work done at Kansas State University by Dr Joe Hancock’s laboratory that for every 100 microns reduction in particle size, feed efficiency improves by 1.4%. As an example, assume that cereals are ground at 900 microns (medium-coarse), leading to a 2.9 feed/ gain ratio in the finishing barns. If particle size is reduced to 600 microns, feed efficiency is expected to be improved by 4.2% at 2.68. Of course, this improvement in feed efficiency should not be outweighed by the cost of grinding cereals to such reduced particle size. In wheat-based diets, ulcers don’t start to become problematic in stressed pigs until particle size is reduced below 600 microns.

8. Enzymes
These are valuable tools against the major non-starch polysaccharides found in cereals, especially in wheat (arabinoxylans) and barley (beta-glucans). For diets based on wheat and barley, particularly if these cereals are of poor quality (as defined by a large concentration of non-starch polysaccharides), the addition of a cereal-specific enzyme should increase metabolisable energy concentration by about 50 kcal/ kg complete feed. The cost of using such an enzyme should not be outweighed by the cost of providing a similar amount of energy through other sources (lard, tallow, soy oil, etc).

9. Mycotoxins
Pigs invariably suffer from lower performance when fed diets even with low levels of mycotoxins. It is best to determine the predominant mycotoxins for the cereals used and then apply a specific product, instead of using a blanket approach that usually costs more and does not cover region-specific mycotoxin problems. For example, maize from the Americas is often contaminated by aflatoxins, but maize grown in Europe usually suffers from a host of totally different mycotoxins. If sources of cereals are variable, then it is best to use a cocktail of anti-mycotoxin agents with a wide spectrum of coverage.

10. Balanced diets
This is easier said than done as it requires the use of a growth model to compare nutrient requirements versus nutrient supply. And, this is just the first step. Then, a qualified nutritionist is required to assess the changes needed to match the two together in an effort of cutting cost by reducing excesses, covering deficiencies, or preferably both.

11. Pelleting
Pelleted feed is most likely to improve feed/ gain by 5 to 15% depending on diet nutrient composition, ingredients used, and of course, the weight class of the animals. For example, greater improvements are expected in younger animals. As always, the extra cost of pelleting should not be greater than expected benefits, especially now that the price of energy is extremely high.

12. Cereal alternatives
Usually this is the first solution that comes to mind when cereal prices go up. But, unless large quantities of such alternatives are locked in before the market adjusts, it is highly unlikely such ingredients will remain price competitive for long.
  It is a fact in economics, when the prices of reference ingredients increase, the prices of alternatives also increase just below the point where the use of such alternatives is no longer financially rewarding. Based on current market ‘intelligence’, I believe we have already reached such balance, so cereal alternatives are not so attractive anymore.