FEED FOR THOUGHT ▶▶▶
Market uncertainty and risk I
f 2020 was an unusual year for you, it appears that 2021 is giving it a run for its money. In the United States, on 7 May, corn hit a high of $ 7.73/bushel (€ 251/tonne) compared to a low of $ 3.10/bushel (€ 122/tonne) back in August 2020.
Soybean meal had a market high this year on 14 January of $ 464.90/tonne and, similar to corn, had a market low also in August 2020 of $ 286.80. Let us not for- get vitamin and methionine shortages as well over the last year. Luckily, swine prices are also trading higher than normal globally. But let us consider the traditional farmers in the USA growing 50% of their corn and either locking in corn at harvest, hedging the future market or buying on demand at the end of the year. If we consider a nutritional programme without any formula reformulation, the producer buying on demand at the end of the second or third quarter will be paying up to 60% more in feed costs than producers who bought at August 2020 prices. When markets become this opportunistic on pig values but have high input costs, one should consider formulating rations to reduce the cost of gain either by driving average daily gain (ADG) or improving feed conversion rates (FCR). During summer, with heat stress conditions and old corn stocks, this could be a daunting task. One key opportunity is to become aggressive with enzymes and their nutrient matrices to reduce diet costs or optimise opportunity ingredients. But further re- search is indicating potential diet cost savings through opportunities of other feed additives, such as peptides. Furthermore, nursery diets present good op- portunities to reduce feed costs without hindering performance or closeout per- formance. Some suggestions for this period are removing or replacing specialty proteins by utilising more soybean meal while adding in a variety of feed addi- tives. If you can reduce your first 7 kg of feed fed at weaning by 25% in cost, that ultimately could result in $ 1.50 per pig value. However, when we consider opportunities to reduce feed costs in finisher pigs, these are not as great as during the nursery period. Financially the best oppor- tunity is to focus on feed efficiency or gain, as it dramatically increases as the pigs near slaughter. For instance, if we improve FCR by four points or 1.5% (2.65 FCR) we could save $ 0.74–$ 1.20/pig, depending on your corn price. If we improve ADG by that same 1.5% (0.95 vs. 0.964 kg/day) we could either save two days in the barn or tack on 1.93 kg more in body weight, resulting in $ 0.28–$ 3.50/pig additional value. The key takeaway is that your nutritional strategies need to change and adapt to your market conditions. Over a two-week pe- riod your feed costs could change by 3% (12–25 May 2021, for ex- ample) or more. With these dramatic shifts in the markets today, how you manage your nutritional programme makes a difference to your ability to minimise the risks and losses.
Casey Bradley For Casey Bradley, growing up on a mixed swine and crop farm in Southwest Michigan eventually led to a successful career in swine nutrition. She currently spends her days as president of the Sun- swine Group.
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▶ PIG PROGRESS | Volume 37, No. 5/6, 2021
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