Plan to dial in your feed programs

Monday, November 23, 2020

Pig farmers can adjust their feeding strategies to save money during short-term market disturbances, and to support long-term profitability.

by Jackie Clark

Hog farmers have persevered through uncertain and difficult times in the industry. Economic downturns, volatile markets and increasing input prices can shift the cost of producing pigs close to, or even higher than, their market value.

As feed is the greatest input cost for pork production, farmers may seek to adjust their feed strategies when market challenges decrease the profitability of hogs. Those adjustments, however, are often not as simple as swapping out or omitting high-priced ingredients.

Ensuring that you transition to a feed program that is both economically feasible and nutritionally sound requires careful consideration and consultation with industry experts.

For example, when marketing became difficult because of pork processing plant closures during the COVID-19 pandemic, many farmers moved to "holding diets, where we fed the pigs very low-cost diets," Dr. Michael Tokach tells Better Pork. He's a professor and extension specialist in swine nutrition at Kansas State University in Manhattan.

The holding diets involved "high feed costs per pound of gain but we didn't want the pigs to gain at all (in the short term). … We had to be very cognizant that, as soon as we weren't in that situation, we wanted to get the pigs off those diets," he says.

In contrast, when marketing opportunities exist but the price of hogs is low, producers want the lowest cost per pound of gain, he explains.

When hog market prices rise and pigs are profitable, "we want to start thinking about our economic driver for feed cost. What's the greatest marginal return? What gives the greatest net profit? … That, many times, means that feed cost per pound of gain increases because the value of the gain is higher," Tokach adds. "Where that switch point is depends on the individual operation."

This month, Better Pork consults with swine nutrition experts and a farmer to navigate the decisions pork producers make to manage feed costs.

Where to start

"When ingredient costs are high or hog prices are low, … we start those conversations by looking at the producer's expectations in terms of growth performance, feed efficiency and options for feed ingredients," says Dr. Laura Greiner. She's an assistant professor and expert in swine extension in the department of animal science at Iowa State University in Ames.

"Interestingly, we don't always look at feed efficiency. … What we really look at is trying to optimize cost per kilogram of gain or kilogram of carcass gain."

This approach may not optimize feed efficiency "because we might use ingredients that are significantly lower in cost, but they might result in slightly elevated feed efficiency. In the long run, (this strategy) will save us money," she explains.

Evaluating the market situation and deciding on production and economic targets to meet that situation will help with decision-making.

"Our goals change when we move from a higher market price to a situation … where we're operating at or below the cost of production," Tokach says. "We have to question whether we would want to keep doing anything we were doing to improve pigs' growth rate." For example, farmers and their swine nutritionists may opt to immediately removing growth-promoting feed additives, especially those ingredients with low nutritional value, that mostly aim to drive food intake.

Feed for grow-to-finish pigs typically represents the majority of feed costs on a farrow-to-finish swine operation, so adjusting feed programs during that stage will "probably will have the biggest impact" on costs, says Jan Geurts, director of swine nutrition at Nutrition Partners Inc. This livestock feed and nutrition company is based in Airdrie, Alta., with additional offices in Brandon, Man., and Saint-Apollinaire, Que.

When considering feed for "sows and nursery pigs … the range of error is a little bit smaller," says Geurts. These groups have more specific nutritional requirements, and you may not be able to use as many low-cost alternatives.

Short-term strategies

If producers are considering changes in their feeding programs, "we start by looking at what's going on at the barn or pig level," says Greiner. This process includes examining barn temperature, ventilation, pen spacing, and health status. These factors can all affect the ability of pigs to turn feed into gain.

"We also look at the feed type. Are we feeding a mash or a meal form, or are we feeding a pelleted product? That might be something we can change quickly" if it would offer an economic advantage, says Greiner.

For example, switching from a meal to a pelleted feed can increase feed efficiency by 4 to 6 per cent. If the cost to switch is lower than the feed savings gained through increased efficiency, this switch would be economically advantageous.

Farmers should also ensure their feed strategies minimize waste. "There can be between 2 and 20 per cent feed wastage on a pig farm," so the cost can add up quickly, says Geurts.

Graham Learn, a pig farmer in Oxford County, Ont., highlights the importance of monitoring feeders. "Make sure you're not underfeeding or overfeeding your pigs," he says.

Learn runs a farrow-to-finish operation with 850 sows in two barns, one with pens and the other with group housing.

Another practical tip to avoid wasting feed is to aim to match feed programs and quantities to pig batch size to avoid leftover feed when you ship hogs, he adds.

Improving health status or adjusting feeder type are longer-term solutions that may require six months or a year to enact or observe changes in the herd. In the short term, however, producers can "make sure our health programs are in place and the environment in which we raise those pigs is as optimal as we can make it. Then we start looking at the diet," in terms of form and formulation, says Greiner.

When considering ingredients, "the major cost in a pig diet is the energy and protein sources. So, you want to look very closely at any of those" ingredients, Tokach says. For example, "added fat is very difficult to pay for in most situations right now because, even though it improves feed efficiency, it often costs you more money to increase energy density in many areas of North America. You have to really question whether you're getting any benefit."

Producers may also consider replacing corn with lower-cost grains, he adds.

Together with you nutritionist, consider all possible changes within the current market context.

"Replacing soybean meal with synthetic amino acids or other protein sources often saves you money, (but recently) soybean meal has dropped in price. So, you have to be careful," Tokach explains. Although one feed ingredient may usually be cost effective, shifts in the market may mean strategies must change.

Locally, pig farmers may be able to find alternative products available at a low cost.

"I encourage producers who are near manufacturing facilities to think a little bit outside the box," Greiner says.

Many farmers use distillers grains, but in Greiner's region "there are other options. We can certainly look at things like pet food manufacturing. Sometimes their dry pet food can't be used for whatever reason and that can be fed to swine."

Tightening feed costs can involve "finding those ingredients that can work economically and nutritionally, and … that can be delivered and handled appropriately," she adds.

Who to ask for help

Of course, you should make any changes in feed programs in consultation with a swine nutrition expert and consulting your broader swine advisory team is also beneficial.

"The more that I farm, the more that I realize you need good people to work with," says Learn.

When discussing feed changes, "we generally sit down with four key elements: our vet company, our genetics company, our premix company and our bulk commodities" supplier, he says.

"Those are the four that you really need to work with. They're all different companies but they all have to have an idea of what the others are doing or what you're doing so they can help you."

Tokach and Greiner agree.

"You don't want to drop any ingredients that are absolutely necessary without consulting with a nutritionist and making sure that those changes are correct," Tokach says.

Producers should "work with their nutritionists. ... They understand what can and can't be as easily substituted," adds Greiner. Most substitutions aren't one-to-one replacements, and additional adjustments will be necessary to meet nutritional needs.

Peer benchmarking groups can also assist in examining feed strategies and costs, says Learn.

Geurts suggests calculating Farm Feed Conversion ratio, which "is basically all the feed that you need from birth to shipping the pig. (This ratio) takes into account all the sow feed, all the nursery feed, and all the grow-finisher feed," he says.

This figure gives producers a way to objectively compare feed costs to other farms where management strategies may be different, he adds. "You can make better comparisons, plus you have a better view on your bottom line," he says.

Longer-term solutions

As ups and downs in hog markets are a veritable guarantee, how can farmers build a lasting strategy to manage feed costs over time?

Learn and his family adapted to economic challenges a decade ago by transitioning to making their feed.

"We have a grain elevator and dryer, so we store all of our corn. Ten years ago, we built a feed mill and have all the bulk commodities. We pre-mix on site and mill and deliver all of our feed," he explains. "We were looking at wanting to survive and future expansion (opportunities. On-farm feed production) was another way of keeping more dollars on our farm."

The Learns use the feed mill to control their feed quality, and "we can adjust our rations based on price, quality, or new information that we get," he adds.

"It's not for everybody, there's definitely risk with making your own feed. You have to do it well," says Learn. "A lot of people think that milling your own feed is a lot cheaper. It's more (like) paying yourself to do the job, instead of paying someone else."

Learn has also adopted precision sow feeding.

"We weigh and backfat all of our sows after they're weaned. That gives us a backfat score of what condition that sow's in, so we adjust the feeders in the barn as needed," he explains. This strategy keeps sows in optimal condition and "we've actually brought down our total (feed) usage throughout the year. … Over the year, doing that extra step of precision feeding can add up to a lot of dollars in savings."

He encourages farmers to collect more data about their pigs to help improve their feed programs.

"It's really hard to adjust anything on your farm of you don't have any information or data to draw from," he says. The collection and analysis of production data "has made our farm more successful and more sustainable."

Geurts agrees. Since grow-to-finish pigs account for the greatest portion of feed costs, he thinks producers may find success through collecting more data on that group.

"We need information to determine where the strong and weak points are, and where can we improve the bottom line the most," he says.

Data and precision feeding involve an initial time and technology investment, but can pay dividends in feed savings and other benefits.

"We often assume that crude protein is an important cost in the diet of the pig and, when we can adjust the crude protein of the feed, we can decrease the cost of it," Dr. Aline Remus tells Better Pork. She's a research scientist with Agriculture and Agri-Food Canada in Sherbrooke, Que. who studies the precision feeding of pigs.

Amino acid requirements change over pigs' lifetimes, she explains.

A traditional feeding system in Canada may involve three growing phases of 28 days when the pigs are 25 to 110-120 kilograms (55 to 242-264 pounds). In Remus's research, however, the team uses only two diets but adjusts the ratios between the two feeds to meet pigs' daily requirements. By taking this approach, the scientists both reduce feed costs (as they purchase two types of feed instead of three) and meet the changing nutritional needs of the pigs, she says.

Precision feeding can address the diverse needs of growing pigs. Nutritional requirements vary from herd to herd, and even between animals in the same litter due to sanitary status, genetics, behaviour, and intrinsic variation that scientists still do not fully understand, Remus explains.

"When we're able to adjust the diet for each farm or tailor the diet for each herd, we can feed the animals closer to their requirements and decrease the (feed) cost," she says.

Farmers thinking about adopting precision feeding should evaluate the level of technology and automation that makes sense for their operations.

"For some producers, group precision feeding, which is adjusting the diets daily for a group of pigs, can be a good option. (This system) requires less automation than dealing with individual pigs," Remus says. Precision feeding for each individual pig generates more data, and so is "a viable option for producers who are comfortable with a high level of automation on their farms."

In her research, Remus finds that precision feeding can decrease feed costs by 12 per cent, or about $8 to $12 per pig.

"The feeder cost can be gradually recovered over the production cycle," she says. Precision feeders could become more affordable over the next five years, she adds.

Precision feeding can lead to other cost-saving benefits, such as decreased labour requirements, and the ability to quickly adjust feed programs to speed up or slow down growth rate to "help you deal with variations in the market," Remus says.

Value-added opportunities may also exist in the future. "Over time, we can probably brand pigs that are precision fed because they increase their nutrient efficiency. … Therefore, they have a smaller environmental impact," she says.

Finally, the data collected from precision feeding can aid in early detection of disease, reducing veterinary and herd health costs, she adds.

Potential pitfalls

"We always want to caution producers, when they're trying to lower their cost, to make sure they don't take steps that end up increasing (costs) in the long run," Tokach says. "Make sure you have somebody who understands the amino acid and energy requirements of the pigs to help make those decisions."

Greiner agrees. "Any time we're looking at substituting an ingredient, we have to understand several factors" including potentially harmful components like mycotoxins, nutritional soundness, economics and availability, she says.

Producers should avoid making multiple changes to pig diets in too short of a period, she adds. "Sudden changes can potentially cause (pigs) to go off feed and can affect their growth and performance. … We really want to make sure that we're thinking about this fully, and not just making a knee-jerk reaction."

In consultation with relevant professionals, producers should revisit their feed strategies every three or four months. Be proactive with plans to enact if the markets hit certain checkpoints or trends, Greiner says.

To weather hard times, "we don't want to get caught in a ‘low cost is always best' kind of mindset. Really, we want to look at optimizing performance while minimizing cost," she adds.

Thoughtful short-term adjustments, while collecting more data and collaborating with other producers and swine experts in the long term, can help farmers tighten feed costs and produce profitable hogs.

"The more information you gather, and the more benchmarking and precision (strategies) that you (implement) on your farm, pays – plain and simple," says Learn. BP