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DTN Distillers Grain Weekly Update
Friday, November 21, 2014 10:51AM CST

By Cheryl Anderson
DTN Staff Reporter

DAVENPORT, Neb. (DTN) -- Beef producers may lower the cost of winter feed rations by replacing hay with lower-cost corn and corn co-products.

Commodity prices have taken a tumble in recent months, as have corn and corn-derived feeds such as distillers grains. Hay and forage prices have fallen somewhat, but not to the same degree, according to Warren Rusche, extension cow/calf specialist at South Dakota State University in Watertown, S.D.

The comparative stability in hay prices is not entirely due to supply, Rusche said, although there has been some decrease in alfalfa and grass hay acres in recent years. He said part of the reason hay prices are not declining as much as grain is that hay producers still remember 2011 when a lot of hay from South Dakota was shipped south because of drought. The next year, South Dakota producers found themselves with a supply shortage because they sold off so much hay.

"I suspect part of the mindset right now, at least in South Dakota, is that people who found themselves in that situation are doing whatever they need to do to make sure it never happens to them again," Rusche said.

With corn being a more concentrated source of energy than hay, Rusche set about to explore differences in hay and corn/DDG prices by formulating three different rations for 1,400 pound cows in late gestation that were designed to meet protein requirements and maintain body condition. The rations were based on published price data from South Dakota feed markets in early October:

-Ration 1: A traditional hay- based diet using alfalfa hay (19% crude protein) and grass hay (7 percent CP).

-Ration 2: A limit-fed diet consisting of corn silage, grass hay and modified distillers grains.

-Ration 3: A limit-fed diet using grass hay combined with corn and MDG.

Rusche said he used modified distillers grains simply because that is the most popular form of distillers grain sold in his area, although he added that with some simple adjustments in the numbers wet, modified or dried distillers can be used.

Out of the three rations, Ration 3 using the least amount of hay was the least-cost ration (see table).

Feedstuff Price Ration #1 Ration #2 Ration #3
Corn grain $2.70/bushel 6
Alfalfa Hay $120/ton 5
Grass Hay $80/ton 25 15 12
Corn silage $28/ton 12
Modified Distillers $48/ton 8 6
Feed Cost Per Day $1.34 $0.96 $0.91

*By Warren Rusche, SDSU Extension Cow/Calf Field Specialist. Courtesy iGrow.org

In this situation, if you can manage a limit-fed program, you can achieve about a 40-cent difference in cost per day by using corn and corn co-products, he said.

That has not always been the case, Rusche said, remembering that a year ago, distillers grains prices were so high that nutritionists were telling producers to only use the bare minimum of distillers needed to meet supplemental protein requirements.

"Distillers wasn't the good buy as it had been in past years," he said. "That shows just how much things change, what was the right answer a year ago is not necessarily the right answer now."

Producers do need to keep in mind a number of variables, Rusche pointed out. First, Ration 2 and 3 both depend on the producers' ability to deliver a set amount of feed per day to cattle to limit how much they can eat. If unable to do that, producers might need to consider different options, such as giving cattle free access to cornstalk bales, supplemented with distillers grains.

Of course the recent snow has closed the door on getting cornstalks baled for some producers, so some may need to remain with traditional hay as the feed method of choice.

There are other considerations as well. First, limit-feeding requires a certain amount of manpower and equipment, as well as sufficient bunk space to prevent cows lower on the pecking order from not getting insufficient nutrition. The guideline, Rusche said, is to allow 30 inches of bunk space per cow.

Strong, sturdy fencing is also vital if undertaking a limit-fed situation. Cows will always consume more feed than offered in limit-fed situations, if given free choice. They are often unhappy if their appetites are not satisfied and will look for ways to find more food.

Other strategies in implementing limit-fed rations include:

-Basing diets on actual nutrient analyses.

-Measuring or closely estimating body weight of cows in order to accurately formulate rations and prevent nutrition deficiencies.

-Gradually adapting cattle to diet changes, especially if using high-starch diets.

-Keeping in mind that colder winter weather will increase nutrient requirements.

Producers also need to keep in mind that local hay, corn and distillers prices, local basis levels and the producer's proximity to an ethanol plant will all play a role in what is the best option of rations for each producer.

"Work with a nutritionist or an extension specialist for what will work best for your farm or ranch," he suggested. "Take everything into consideration and go through all your options."

Rusche warned producers against falling into the trap of thinking, "This is the way I've always fed my cattle and this is the way I will continue."

"We need to adapt to changing market conditions," he said. "Right now the market is pointing us toward corn and corn-based co-products. So that needs to be on producers' radar screens to allow them to meet nutrient requirements at the best possible costs.

"The corn sector is providing us with some real opportunities, and we have to figure out how to incorporate those into our feed programs," he said.

Cheryl Anderson can be reached at cheryl.anderson@dtn.com

(MZT/AG)


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