Could Choice White Grease now be pricing in at your farm?

Posted on December 1, 2012 in Swine Performance
By Julie Salyer

By now, we have all felt the strain of this year’s higher grain prices. As prices for corn and soybean meal remain high and uncertainty of futures continues, we are often seeking options for relief.  It is as important as ever to work with your local Vita Plus consultant to constantly explore viable options and monitor your diets as economics can often change over time. Since midsummer, prices for corn and soybean meal have continued to increase whereas the fat price has remained pretty constant. Why? As with anything, several factors have contributed to this trend. Right now, animal production is seasonally strong and therefore Choice White Grease (CWG) production is high, which helps weigh down prices. These large production outputs are also estimated to remain through December, which should help maintain lower prices. Some of the factors that have currently played a hand in steadying the fat price are a lower biodiesel demand as well as lower feed demands because of the warm fall we have had so far. Of course, these points are subject to change at any time depending on the biodiesel sector demand and/or weather. Because of the current conditions, we’re seeing changes in what ingredients may be economical options to feed hogs. Using our Nutrition Program Alternatives tool, we were able to compare the cost savings of diets with or without fat using today’s current corn and soybean meal prices compared to the prices of midsummer 2012. In June, prices were at $6.50/bu corn, $470/ton soybean meal, and $0.42/lb fat. Using these prices, diets with fat did not price in and, in fact, cost an additional $0.65 per pig. We then used our calculator to compare fat versus non-fat diets with today’s ingredient prices of $7.50/bu corn, $600/ton soybean meal, and a constant $0.42/lb fat. In this current market scenario, using fat priced in and also helped save about $0.62 per pig. This tool helps us demonstrate how the change in price of grains over a few months’ time can impact the array of other ingredients available as positive economic options for you and your business. This example also helps highlight the importance of what it can mean to your business to constantly monitor ingredients.  Obviously, these numbers can vary depending on your particular situation.  For example, you may have locked in your grains versus using the cash markets. If you have any questions or are curious as to whether or not fat may price in for your current diets, contact your Vita Plus consultant so we can use our tools to find what works best with your operation right now. About the author:  Julie Salyer previously provided technical support for Vita Plus field and sales staff and conducted nursery research trials as a swine nutritionist.  Salyer received her bachelor’s degree at The Ohio State University and master’s degree in swine nutrition at Kansas State University.  She is originally from southwest Ohio, where she raised and showed livestock for the county 4-H fair. She was also a student worker at Ohio State’s swine farm and completed an internship in North Carolina for Murphy Brown LLC, which she says was instrumental to where she is today.  Salyer is active in church and enjoys hunting, kayaking, hiking and spending time with her husband, Brandon, and their two dogs.

Category: Feed costs
Feed ingredients
Swine Performance