Current Progressive Dairy digital edition
Advertisement

0209 PD: Use SESAME to gauge the value of feeds in uncertain pricing times

Elliot Block Published on 14 January 2009
Feed prices have moved like a roller coaster over the past year, and we continue to see feed markets and futures change almost daily. The ups and downs in feed costs have been the result of economic instability, estimations of 2008 crop production, varying market speculation and highly volatile and variable feed ingredient and commodity prices. Regardless of feed price volatility, the same underlying objective rings true: To maintain productivity, focus on providing your cows with high-quality ration nutrients that will allow them to perform to their potential and maximize profitability.

How this is achieved and the feeds we use to reach this goal may change, but the basic principle will not waiver. Dairy economists cannot predict where or when prices may stabilize, but they recommend that producers be proactive in feed purchasing decisions and stay informed on the changing market. More knowledge can make your decisions more effective and ensure cows are receiving the highest quality nutrition, regardless of market fluctuations.

Ask SESAME to identify bargains
One tool being used to identify high-quality feeds that maintain ration consistency is SESAME.

advertisement

advertisement

SESAME is a software program developed by Dr. Normand St-Pierre, professor of animal science at Ohio State University. The program prices 25 commodity feeds commonly used in dairy rations and estimates their value compared to their current market price.

SESAME then divides the 25 feeds into one of three categories based on the nutrients they supply to the diet:

Overpriced
When compared to the price of the nutrients the feedstuff provides, these feeds are more expensive than their estimated value, St-Pierre explains. Use feeds from this category sparingly, especially if another alternative can provide the same nutrients at a more reasonable cost.

Break-even
The pricing of break-even feeds is close to their estimated nutrient value. Continue to use feeds in this category because you are paying what the feedstuff is worth.

Bargain
Feeds in the bargain category are priced well below their actual values, which make them a great buy, St-Pierre advises. Bargain feeds are especially advantageous if they supply high-quality nutrients to the diet and can replace a feed from the overpriced category.

advertisement

Because of feed cost volatility producers cannot be committed to feeding one byproduct or feedstuff, but rather they should focus on the nutrients each feedstuff delivers, St-Pierre says. Knowing which feeds are bargain-priced is critical to maintaining ration costs while optimizing cow productivity and rumen stability. St-Pierre warns producers that feedstuffs can move between the three categories as often as monthly. For example, corn priced at $5 per bushel last spring was considered a bargain, while corn priced at $3.25 per bushel a year earlier was considered overpriced.

This is because, compared to other feedstuffs, corn in January provided more nutrients for the price paid versus other feedstuffs delivering similar nutrients. Table 1 on page 60 provides an updated SESAME chart to show how feeds are being categorized as of early January 2009. Note that the chart represents current pricing in Ohio feed markets, which may be slightly different than your local prices. While feeds in the “bargains” column offer savings opportunities and their usage should be maximized within the limits of a properly formulated ration, it would be nearly impossible to formulate a high-quality ration with feeds only in the bargain column.

In addition, prices within a commodity can vary considerably because of quality differences as well as non-nutritional value in the form of nutritional services, blending and terms of credit.

Using SESAME results
To best use the information SESAME provides, St-Pierre recommends the following:

Monitor prices closely
When commodity prices are moving dramatically, sometimes daily, monitor feed values regularly to make sure you’re getting the best feeds based on nutrient content.

Get nutrients cheaply
Match nutrients from overpriced feeds with those considered a bargain, St-Pierre says. If necessary, you can include one or two feedstuffs that are considered overpriced, but reduce the amounts fed to keep the total ration cost reasonable.

advertisement

Look beyond old patterns
To find a cheaper ration that provides all of the necessary nutrients, be willing to accept that alternative feed sources may provide the same nutrients at a better value.

Minimize variability
Making drastic changes to the ration based on today’s price alone can cause more problems than it solves, including a drop in dry matter intake and milk production. Cows are creatures of habit, which means little to no change in the nutrient profile can be optimal to maintain performance and health in the herd.

Make note of regional prices
SESAME numbers are extremely regionalized because prices will change depending on availability, transportation and location, St-Pierre explains. Such situations will influence which category feeds fall into. Work with your nutritionist and your local feed suppliers to identify bargains, break-even and overpriced feeds in the SESAME program.

The sesame software program can be accessed at www.sesamesoft.com. Alongside high-quality feedstuffs, research-proven feed ingredients that deliver reliable and consistent nutrient profiles with little variability are necessary for your herd to perform to its potential. By working with trusted, reputable feed ingredient suppliers, you can rest assured that each pound of feed delivers the right balance of nutrients to optimize performance in the milking parlor and the breeding pen while bypassing herd health issues.

As you begin to make your purchasing decisions for the new year, focus on providing quality nutrients, rather than certain feeds, to meet the nutritional needs of your herd. Through a high-quality nutrition program, you can rest assured your herd will perform to its potential, regardless of market volatility. PD

Elliot Block
ARM & HAMMER
Animal Nutrition

LATEST BLOG

LATEST NEWS