Articles > Feed Update

Feed Update

Nov 02, 2020

By: Steve Lebrun, Vice President of Feed

What a difference a year makes when it comes to crops. Last year we had huge concerns about the quality of our crops and the long term storage issues that went with it. This year we have exactly the opposite, extremely good quality corn and beans. The only issue for livestock producers who are purchasing ingredients is the steep rise in prices in the last month. Very few, if any, marketers forecasted this dramatic increase in prices and it has caught many producers open in the market with little or no protection on input costs.

You may have missed the bottom on ingredient prices, but don’t be discouraged and assume there are no options left to pro- tect yourself. Remember risk management isn’t always about locking in a big profit, sometimes it means holding your money together on a particular group or monthly marketing to avoid or minimize the potential losses if markets would turn against you even further.

Another area to concentrate on is more efficient use of the more costly ingredients. Items like reducing feed wastage, adjusting rations according to weight of livestock, and marketing at optimal weights will help reduce feed usage and your associated costs. Also very carefully consider any changes you might make in your diets to save money. Many producers will look at reducing ration costs by cutting items out of their diet such as growth promotants, bypass proteins or ionophores. Consider this - If the product was saving you 5% of a $200 / ton feed it will now save you 5% of a $300 / ton feed. The cost is the same for the product, but the return on investment is much greater now. Reducing nutritional levels in diets may provide short term savings, but al- most always result in long term losses of productivity and efficiencies that cannot be recovered later.

In some respects, marketing or risk management is the toughest part of many producers daily list of tasks. In volatile markets like we currently have, the key is getting information to help you make informed decisions. At United Farmers Coop we have a number of people on staff that are very capable of helping you with these questions and all you need to do is ask.

If you would like more information about any of the services we offer, please con- tact us and we will arrange an appointment at your convenience. This is your cooperative and we are here to serve you.

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