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Savings to be found by tackling high protein feed prices head-on

Despite recent movement in protein feed prices, the high cost of relying on soyabean meal and rapemeal to meet dairy cow protein requirements looks set to continue through the summer and into next winter. According to Trident’s Neil Woolf, the answer lies in combining better value alternatives with careful use of forward buying to both cut protein feed costs and improve margins.

“Second guessing the feed ingredient markets and sitting back to wait for protein feed prices to fall further hasn’t paid dividends for the last couple of years, and is unlikely to be the answer this year either,” he explains. “What’s needed is a more structured approach to protein feed buying, plus an open mind to the alternative feed options that can replace soyabean meal in the ration.”

For any feeds, booking requirements in advance at a known price and for delivery at specific times can be hugely beneficial. Although the absolute lowest price might not be secured, forward contracts help guard against the risk of unforeseen price rises and guarantee supply.

“It’s something that needs to be taken very seriously this summer, with the market having risen considerably in the last couple of years. A lot of farms that didn’t book early last winter also weren’t able to get hold of the feeds that they’d normally use,” Mr Woolf adds.

The graph in figure 1 shows how the forward price for Nov-Apr delivery of soyabean meal (ex-port) varied last year from March 2010 onwards (green line), with winter contracts available for under £270/t right through until August.  The spot price in November was closer to £290/t, and peaked at around £320/t in mid January.

“Even buying winter requirements as late as August could have saved up to £50/t, and with current contracts for Nov-Apr delivery of soyabean meal in the mid-to-late £270s/t delivered, it makes a lot of sense to be thinking about a similar strategy this year,” highlights Mr Woolf. “Most of the focus at the moment is on summer contracts for delivery between now and October, but we’re already seeing some customers booking up to 50% of winter requirements to guard against future price rises.

Figure 1 – Graph showing spot versus six month forward contract prices for soyabean meal*

* For simplicity, prices graphed are for start and middle of each month only to show general trends.

However, better forward planning and greater use of forward contracts is just one option to reduce protein feed costs. As Mr Woolf points out, most dairy producers can also make substantial savings by switching to feeding strategies based on alternative protein feeds.

“A lot depends on whether the priority is supplying additional rumen degradable protein (RDP) or rumen-bypass protein, otherwise known as digestible undegraded protein (DUP),” he states. “The high-protein liquid feed Spey Syrup, for example, is a better value source of RDP than rapemeal, whilst rumen-bypass proteins like SoyPass and ProtoTec are more cost-effective sources of DUP.”

Table 1 shows how the value of these alternative feeds compares against rapemeal and soyabean meal. The table also highlights the different energy contents, with the extra energy in Spey Syrup compared to rapemeal adding further value to the ration.

Table 1 – Comparative costs of rumen degradable (RDP) and rumen-bypass protein (DUP)

Price 1

(£/t)

RDP value

(p/100g RDP )

DUP value

(p/100g DUP)

Energy content

(MJ ME/kg DM)

Traditional protein meals:

Hi-pro soyabean meal

275

9.7

15.3

14.0

Rapemeal

183

9.2

18.3

11.8

Better value sources of RDP:

Spey Syrup (liquid feed)

68

5.4

42.5

14.2

Wheat distillers’ moist feed

70

7.6

25.0

14.0

Better value sources of DUP:

SoyPass (rumen-protected soyabean meal)

329

29.9

10.4

13.5

ProtoTec (heat-treated rapemeal)

224

14.5

15.4

12.0

1 Prices quoted correct at time of going to press, 29t bulk deliveries Jul-Oct, on-farm within 50 miles of source, prices will vary with load sizes and distance from source.

“This impact of extra energy on overall ration cost is an important point when considering alternative protein feeds,” continues Mr Woolf. “Scottish maize distillers’ feed is a good example, with the high level of energy (15MJ ME/kg DM), as well as 43% of the protein being DUP, also allowing some of the expensive energy feeds in the ration to be replaced.”

This is highlighted by the example shown in Table 2, with a 60:40 blend of Scottish maize distillers’ feed and rapemeal directly replacing a 50:50 mix of soyabean meal and rolled wheat, for a £41/t saving. It means that although Scottish maize distillers’ feed might not be the best value source of protein alone, reformulating the ration to take full account of the energy supplied will produce substantial cost savings.

Table 2 – Example cost saving from an alternative protein feed strategy (freshweight basis)

Price 1

(£/t)

Soyabean meal + wheat

Scottish maize distillers’ feed

+ rapemeal

Wheat (home-grown, rolled) 2

186

50%

-

Hi-pro soyabean meal

275

50%

-

Scottish maize distillers’ feed

195

-

60%

Rapemeal

183

-

40%

Energy (MJ ME/kg FW)

12.2

12.2

Crude protein (g CP/kg FW)

290

282

DUP (g DUP/kg)

104

104

Cost (£/t)

231

190

Saving (£/t)

41

1 Prices quoted correct at time of going to press, 29t bulk deliveries Jul-Oct, on-farm within 50 miles of source, prices will vary with load sizes and distance from source.

2 Ex-farm price including £10/t for processing.

“An even simpler option is to use a custom blend as a direct substitute for soyabean meal, as shown in Table 3,” Mr Woolf continues. “The example blend includes just 16.5% soyabean meal, and maintains the supply of high quality protein through judicious use of rumen-protected soyabean meal (SoyPass).

“The result is a cost saving of around £25/t at current prices, and without any reformulation of the ration or extra complication from using additional straights.”

Table 3 – High protein custom blend formulation

Ingredients:

37.5% SoyPass rumen-protected soyabean meal

35.0% Scottish Maize distillers’ pellets

16.5% Hi-pro soyabean meal

7.0% Rapeseed meal

4.0% Urea

Dry matter (%)

88.2

Energy (MJ ME/kg DM)

13.4

Crude protein (%)

48.0

DUP (%)

17.0

Cost (£/t)*

250

* Prices quoted correct at time of going to press, 29t bulk deliveries Jul-Oct, on-farm within 50 miles of source, prices will vary with load sizes and distance from source.

Alternatively, if additional DUP supply is the only requirement, such as when feeding high levels of RDP-rich grass or grass silage, then it’s the rumen-bypass proteins that are best value, as highlighted in Table 1. According to Mr Woolf, it’s entirely possible for high yielding dairy herds to be fed no soyabean meal at all, with a very high quality rumen-bypass protein like SoyPass used to supply the necessary DUP at a cost that’s currently 31% less per unit than from soyabean meal.

“Researchers at the Land O’Lakes Research Farm in Iowa have also shown that replacing soyabean meal in a dairy ration with SoyPass can increase fat-corrected milk yield by 2.2 litres/cow/day,” he adds. “And similar trial work carried out in Germany produced an average yield response of 1.4kg/cow/day over the first five months of lactation, along with a more persistent lactation curve.

“Alternatively, the same yield could be produced using a lower ration crude protein level (to reduce feed costs further), an option proven by research carried out by the University of Nebraska.”

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