Dr. Steve Dritz - Economic evaluation of feed per unit of gain: Is lower always better?

Economic evaluation of feed per unit of gain:

Is lower always better?

Kansas State University

International Conference on Feed Efficiency in Swine

Audience• This conference will appeal to anyone with a highly

technical interest in pork production, including pork producers, industry suppliers (feed, genetics, ingredients, additives, equipment, etc.), consultants (nutritionists, geneticists, veterinarians, etc.), researchers (faculty and students) and pork producer organizations.

As feed costs have increased over the last several years, feed per unit of gain (feed efficiency) has increased in economic value relative to other production parameters.

Agenda Factors impacting feed efficiency Economic calculations Capturing feed efficiency improvements

How do I measure? Close out Feed Efficiency

• Total feed delivered to the group

(Weight sold – Weight placed)• Note dead pig weight should not be included in

the calculation Pig Days with dead pig gain

• ADFI=Feed/Pig Days• ADG=Gain/Pig Days• ADFI/ADG=F/G

Which group has the better feed efficiency?

Closeout A - FG=2.90

Closeout B - FG = 2.84

Which group has the better feed efficiency?

Closeout A – 25 to 127.7 kg (55 to 280 lb)

Closeout B – 23.7 to 113.5 kg (50 to 250 lb)

Which group has the better feed efficiency?

Weight adjusted

Closeout A - FG=2.73

Closeout B - FG = 2.84

Closeout A - FG=2.90

Closeout B - FG = 2.84

BW, kg Wt., lb. Feed Intake, kg.

Feed Intake, lb.

29.3 64.5    34.9 77.0 10.3 22.741.0 90.4 22.3 49.2

116.2 256.1 235.0 518.0122.6 270.3 258.1 569.0128.9 284.2 281.4 620.4135.0 297.6 304.9 672.2

2.76

3.05

Data Source: PIC Tech Memo 344

Factors Affecting Finishing Pig Feed Efficiency

Weight-in and weight-out Grain source Added fat Meal vs pellets Genetics

These variables need to be accounted for when comparing feed efficiency among different groups

Feed cost per unit of gain = Feed cost / unit of gain

Example: 250 kg Feed x $ 0.25 per kg / 100 kg gain = $62.50/100 kg gain or $.625/kg gain

Feed cost per unit of gain = feed cost per unit x feed per unit gain

Example: $ 0.25 per kg feed x 2.5 F/G = $0.625 per kg/gain

Scenario 1 – Lower feed cost, no difference in feed efficiency

Examples include: Reduce cost of feed ingredients or removal of ineffective additives.

Direct indicator of economic performance since there is no impact on any of the biologic parameters

Scenario 2 – Higher feed cost, lower feed efficiency or the reverse of lower feed cost with higher feed

efficiency resulting in no impact on ADG

  Dietary Caloric Density

Item Low High

Feed Cost per Kg, $ 0.28 0.31

Expected FG 3.50 3.30

Cost per kg gain, $ 0.98 1.02

Scenario 3 – Higher feed cost, lower feed efficiency and higher ADG or the reverse of lower feed cost

with higher feed efficiency and lower ADG

  Dietary Caloric DensityItem Low HighFeed Cost per Kg, $ 0.29 0.32Expected FG 2.20 2.07Cost per kg gain, $ 0.638 0.66

Scenario 3 – Higher feed cost, lower feed efficiency and higher ADG or the reverse of lower feed cost

with higher feed efficiency and lower ADG

  Dietary Caloric Density   Low HighFixed Time Days 20 20kg Gain 17 18Feed, $ 10.84 11.92Revenue, $ 13.84 14.65Income over Feed, $ 2.99 2.73

Scenario 3 – Higher feed cost, lower feed efficiency and higher ADG or the reverse of lower feed cost

with higher feed efficiency and lower ADG

  Dietary Caloric DensityItem Low HighFixed Weight    Days 21 20kg Gain 18 18Feed, $ 11.48 11.92Facility, $ 2.10 2.00Revenue, $ 14.65 14.65Income over Feed & Facility 1.07 0.73

Other considerations when changing feed per unit of gain and growth rate

Alter rates of protein and fat deposition • Change lean composition

Alteration of yield• Change the amount of feed to achieve the

same carcass weight Payment grid or value of products

produced

Develop models based on performance to indirectly predict an influence on profitability• Simple spreadsheets• Growth simulations

Feed per unit of gain provides a gross indicator of profitability

More sophisticated modeling is needed to determine if lower is better

Better feed per unit of gain: Minimal marginal cost

Reduce Feed wastage Feeder providing feed to two 25 pig pens

• $12,000 of feed per year per feeder• Replacing feeders is a high return activity

A 40,000 sow farrow to finish system• wasting one hand full (0.5 kg or 1.1 lb) per

feeder• about $1,200 of wasted feed per day

Better feed per unit of gain: Minimal marginal cost

Grain Particle Size Reduction improvement of in feed per unit of gain of

1.2% for each 100 micron reduction Each reduction by 100 microns can be

worth $0.75 to $1.00 per pig 500 to 600 microns for ground grain has

become the norm US Midwestern meal based diets

Better feed per unit of gain: Significant marginal cost

Genetics Growth rate, feed efficiency and lean

relatively easy to measure Other traits like meat quality and

survivability more difficult to measure Implications of health and changing sources General observation is that investments in

genetics to improve feed per unit of gain is usually a high return

Better feed per unit of gain: Significant marginal cost

Nutrient Requirements

Era of feeding for biologic maximum is over

Economic optimum does not always correlate with the biologic optimum

Better feed per unit of gain: Significant marginal cost

Feed Processing Pelleting

Feed efficiency response is sensitive to pellet quality

High upfront capital cost

Conclusion

Is lower always better?

As with most things the correct answer is “it depends”

25

International Conference on Feed Efficiency in Swine

Hilton Hotel/Qwest Center, Omaha, NE November 8th and 9th, 2011 Conference Objective

• To provide in a single forum the current state of the art on all aspects of feed efficiency in growing/finishing swine. As such, more than a dozen diverse topics ranging from in-barn management to nutrition to genetic selection will be addressed.

Thank you!

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