Despite predictions of record-high market hog prices in 2011, swine producers will be challenged once again to achieve profits in their operations because of increasing feed ingredient costs.
Rommel Sulabo, University of Illinois postdoctoral researcher in the Department of Animal Sciences, shared five ways producers can reduce costs and increase profits at the Illinois Pork Expo in Peoria.
"Feed costs make up 70 percent of a producer's cost to produce market hogs," said Sulabo, a member of Hans H. Stein's swine nutrition laboratory. "As feed ingredient costs rise, it's become even more critical for producers to take a closer look at non-traditional feed ingredients. Fortunately, there are a number of options available for reducing diet costs by changing ingredients and formulating new diets."
Incorporate DDGS into diets
Although the cost of distiller's dried grains with solubles (DDGS) has increased during the past six months, there are still significant savings associated with the use of DDGS in swine diets, Sulabo said.
With current prices for corn, soybean meal, and DDGS, costs of swine diets are reduced by $7 to $9 per ton for each 10 percent of DDGS that are included in the diets. In most cases, 30 percent DDGS can be included in diets fed to all categories of pigs if an average or above average quality of DDGS is used and if diets are properly balanced for all nutrients. If 30 percent DDGS is included in diets fed to sows, weanling pigs, and growing-finishing pigs, the total cost savings by using DDGS is approximately $10 per market pig produced.
Use small grains when available
If small grains are available, the price of these grains should be followed closely as they may replace all or most of the corn in diets fed to all categories of swine.
Wheat a good option
"Wheat has a slightly greater nutritional value in a pig's diet than corn," Sulabo said. "Wheat can easily replace all the corn in the diets. On a per-bushel basis, a producer can pay between 25 and 50 cents more for wheat than for corn without increasing diet costs."
Barley and sorghum can also replace all or most of the corn in the diets for all categories of swine and the nutritional value of each of these grains is close to that of corn. However, because there are fewer pounds per bushel for barley than for corn, the cost of barley, on a per-bushel basis, should be no more than 85 to 90 percent of the cost of corn.
Oats can replace up to 40 percent of the corn in diets fed to all categories of swine and if available, can easily be used. However, both the bushel weight and the energy concentration of oats is less than that of corn, so oats should be purchased only if the price is less than 80 percent of corn (on a per-bushel basis).
Take a look at other co-products
In certain regions, co-products such as hominy feed, bakery meal, or wheat middlings are available to swine producers. Each of these ingredients may be included in diets fed to swine by up to 30 percent. If they can be purchased at a price that is around 90 percent of corn or less, they can usually reduce diet costs, Sulabo said.
Differences exist in the quality of these ingredients, so it is important to work with the suppliers of the ingredients to make sure an acceptable quality is obtained, he added.
Use fish meal substitutes
The cost of fish meal has increased dramatically during recent years because of reduced catching and increased demand for fish meal from the aqua feed industry.
Among the alternatives that are available are enzyme-treated soybean meal, fermented soybean meal, enzyme-treated pig intestines, poultry byproduct meal, meat and bone meal, and blood meal.
"Weanling pigs usually perform well when fed these protein sources instead of fish meal," he said. "Pigs do not have specific requirements for fish meal, so the inclusion of this ingredient should be reduced or avoided."
Eliminate inorganic phosphorus
Pigs require dietary phosphorus and because the phosphorus present in corn and soybean meal is poorly utilized by pigs, diets are often fortified with dicalcium phosphate or monocalcium phosphate.
However, these phosphate sources have increased in price, causing more producers to use the enzyme phytase in swine diets. By using phytase, a greater proportion of the phosphorus in corn and soybean meal can be utilized and less of the inorganic phosphorus is needed.
The need for inorganic phosphorus is also reduced if diets contain DDGS because DDGS has a relatively high concentration of highly digestible phosphorus. If both phytase and DDGS are used, there is no need to use dicalcium phosphate or monocalcium phosphate in diets fed to weanling pigs after 25 pounds or to growing-finishing pigs.
By eliminating the inorganic phosphorus from the diets, the total costs of the diets will be reduced significantly, he added.
Producers have many options when it comes to diet formulation. In a year when risk management is critical to achieving profit, Sulabo recommends taking a close look at feed ingredients. Reducing feed costs is the quickest way to improve profits.