Pricing feed ingredients on value

By Jay Giesy, Cargill US Dairy Technical Services and Nutrition Lead

Nutrient delivery to cows has always been important and as today’s dairy managers enhance milk component output and efficiency that importance will continue. Higher cow performance also warrants continued improvements in delivering rations with consistent levels of high-quality nutrients.

Think of it this way: Dairy producers and feed managers strive to reduce feeding errors to provide a more consistent nutrient supply to the herd. Nutrition professionals can support those efforts by helping producers make quality nutrient decisions through byproduct ingredients.  

Both nutritionists and producers understand that the foundation of meeting the nutrient requirements of cows begins with forages available on the farm. From there, ration models use an array of ingredients to formulate a diet that meets a herd’s nutrient requirements. With only a few exceptions, most ingredients used to compliment the nutrient supply of on-farm forages are byproducts from other food or fiber industries.      

So, how do you price ingredients based on value?

Let’s look at Table 2 for an example of four different suppliers of dried distillers grain (DDG).  The differences in nutrient profile between DDG sources are noteworthy when it comes to dairy rations. The DDG suppliers in Table 2 range in crude protein (CP) content by over 10%. By way of comparison (data not shown), soybean meal sources tend to have a narrower range of difference in CP while also having a higher CP content, resulting in a CP range of only 5 to 6%. 

Looking more closely at the nutrients provided in Table 2, we see that DDG is not only a mid-level protein source, but also contributes non-fiber carbohydrates (NFC) and neutral detergent fiber (NDF), which carries a high digestibility. Furthermore, DDG fat level can also be a significant factor that determines a DDG supplier’s value.  

Considerable portions of dairy rations consist of byproduct ingredients and understanding the nutrient content of those ingredients is impactful. Cargill nutritionists utilize the dairy MAX™ software to cost-effectively value a farm’s nutrients. See more benefits to value pricing with MAX and contact one of our experts here.