Cost of nutrients and relative value of feedstuffs for Pennsylvania dairy farms

The only alternative for most dairy producers is to partially offset this decline by controlling feed costs. However, changing out expensive feedstuffs for cheap feedstuffs without regard for nutrient content can lead to milk production losses. Selection of feedstuffs based on their nutrient value and price can be a challenge. The SESAME program, developed at The Ohio State University, was designed with this purpose in mind. The software program determines the economic values of dairy feedstuffs by evaluating commonly used feedstuffs based on their content of five basic nutrients: net energy for lactation (NEL), rumen degradable protein (RDP), digestible rumen undegradable protein (d-RUP), non-effective neutral detergent fiber (ne-NDF), and effective neutral detergent fiber (e-NDF). These nutrients are valued on a megacalorie basis for NEL and a per pound basis for RDP, d-RUP, ne-NDF and e-NDF. If you are evaluating your ration ingredients based on other nutrients, be aware that there are differences and consult with your nutritionist on any potential ration changes.

The SESAME analysis of the Pennsylvania feed market uses 29 commonly fed commodities to determine the intrinsic value for each of the five basic nutrients described above in a feeding program. The intrinsic value is the price that the market is willing to pay for that particular nutrient. As an example, a pound of digestible rumen undegradable protein (d-RUP) is currently worth approximately $0.483 in the market (See Table 1), regardless of whether that d-RUP comes from soybean meal, blood meal or corn, etc. For the past nine years that we have conducted this analysis, d-RUP is consistently the most expensive nutrient in a lactating dairy cow’s diet. Based on the intrinsic value for each of the five nutrients within a specific feedstuff, we can determine the potential breakeven price based on a book value for each nutrient in that feedstuff, and economically, where the price of a byproduct feed has to fall to be considered as an alternative in ration formulation. The calculated costs for the five basic nutrients are shown in Table 1.

Table 2 provides the actual prices for the feedstuffs that were evaluated in the current SESAME analysis along with their predicted prices based on nutrient content. In addition, the table includes the 75 percent confidence limits of prices for each commodity. A 75 percent confidence limit indicates that we are about 75 percent sure that the true cost of the feedstuff based on nutrient content is between the lower and upper limit prices. In reading the table, one should consider feedstuffs with an actual price below the lower limit as bargains in the present market. The feedstuffs with an actual price above the upper limit would be considered overpriced, and feedstuffs with actual prices falling between the limits would be priced at their approximate nutrient value.

In the protein byproduct feedstuff markets, there are four undervalued protein sources, cottonseed meal, distillers dried grains with solubles (DDGS) and feather meal. However, farmers should understand the limitations of each of these different protein sources. There are two limitations with DDGS: 1.) a very low content of lysine, one of the two limiting amino acids for milk production in dairy cows, and 2.) variable fat content, which can limit DDGS inclusion level in the diet. Therefore, these “bargain” feedstuffs need to be evaluated very carefully before incorporating them into the diet. Among animal-based RUP sources, fishmeal is extremely high-priced in the market, being marketed at 283 percent of its expected value. The price of blood meal has moved down dramatically as the hog slaughter numbers have risen, and the number of processing facilities change. These animal protein sources will need to be carefully scrutinized in the diet due to their fluctuating prices in the market. Alternatively, rumen-protected amino acid supplements may be more cost effective for balancing for amino acids within a lactating cow diet, and can be effectively used in lower CP diets. The market dynamics suggest that dairy producers should avoid soybean meal 44 percent as it is over its highest market value, and therefore, has virtually no value when compared to soybean meal 48 percent. Canola prices have inched up over the last several months to the point where the spread between canola and soybean meal is less than $100 per ton, which makes soybean meal a more economical purchase on the basis of protein content.

The most cost-effective energy feedstuffs based on the data from the past month are bakery byproduct meal, corn gluten feed, hominy, and wheat midds as their market prices are at or below the lower limit price. If possible, avoid citrus pulp and tallow as they continue to be overpriced in the market. Supplemental fat sources are another overpriced feedstuff that need to be used judiciously if possible given the abundance of more cost-effective energy sources. However, because the prices used in the SESAME analysis are aggregated, approximate feed prices, the local prices for all feeds may be different than those listed in Table 2. There are several warnings about the information presented in Table 2.


1. Actual Prices listed in Table 2 are approximate and represent aggregated prices for the state of Pennsylvania. Check with your local suppliers for actual delivered prices.

2. Prices are on a commodity basis, and represent farm-delivered, full tractor-trailer loads (TTL) prices. No services are included; commodity feeds have little or no nutritional guarantees.

3. Results do not imply that a balanced ration can be made solely with bargain feeds, or that overpriced feeds should be eliminated from the ration. Certainly, there is an economic incentive to maximize the use of bargain feeds and minimize the use of overpriced feeds.

4. The analysis is based on the five most economically important nutrients in dairy rations. For very high production herds, other nutrients such as amino acid content of the undegradable protein should also be considered. This would change the predicted price of some commodities such as blood meal.

Dr. Ken Griswold, Technical Service Manager, Kemin Animal Nutrition & Health

Dr. Normand St-Pierre, Director of Research and Tech Services, Perdue AgriBusiness


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