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Slide 1

Financial Considerations in Setting Diet Energy Specifications

R. Dean Boyd

Technical Director and Nutrition LeaderThe Hanor Company and Triumph Foods Group

Leman Swine Conference,Enhancing Energy Utilization and Role of Fat, 2015

Road Map –

This Presentation addresses 4 Key Facets in an effort to Guide the setting of Diet Energy Specifications.

Special Emphasis is given to Properly Valuing FAT –

1. Basis for Selecting Diet Energy Specifications

2. Financial Value of Fat for Growing Pigs

3. Revised Emphasis of Fat for Prolific Sows

4. Purchase Tool for Financial Value Fat Sources for

Growth and Reproduction

2

Perspective: Nutrition Inputs to Deliver Greatest Profit

Practicing Nutritionists have an Sobering responsibility; 65-70% of Production Cost is Feed.

Best NOT to use Nutrition simply to achieve Lowest Production Cost because –

Lowest Cost tends not to Maximize Profit

Maximum Profit is more Complex

Ex. Paylean increases FCOG

Ex. FCOG for 290 lb vs 270 lb Pigs

Energy is the Most Expensive Diet Component –

Q How does one choose the Energy level to Formulate to in

Diets that are more complex than Corn-Soybean meal ?

3 Things Distinguish Practicing Nutritionists:

System to ID Best cost Energy level

Accurately Value incoming Ingredients

Use most discriminating Energy term

NE

or Effective ME (EFF ME)

3

Foundation Information

4 Pieces of Information are Essential to setting Profitable Energy and Lysine specifications, priorto Formulation.

Total Mcal NE (EFF ME) for by Phase

Fat Dose response data for each Phase

SID Lysine Response curve for Financial Evaluation of Optimum Profit level (dynamic)

Life-time Equation with Multiple criteria esp. Feed

Cost, Carcass Lbs, Lean $

Crystalline Lysine response curve (4 amino acids set

96% asymptote; Valine, Isoleucine float)

Energy – Select Specification with Discriminating Term

Starting Point:

Energy measure that is discriminating (NE, EFF ME)

NE has always been the most discriminating measure of useful energy for Ingredients. It has not been widely used to Formulate pig diets in North America until recently (exclu. Purina, Cargill). Our diets were relatively simple, but this has changed.

2 Game-changers allow us to use NE reliably:

NRC 2012 provided trustworthy estimates, which can be . . .

Validated by Growth Assay (Boyd et al. 2010)

Empirical Validation of Ingredient Value is Essential !

4

Energy – NE Values Must be Correct for Ingredients

ADG 2.02 2.09 2.17ADFI 5.54 5.64 5.36

Mcal NE/d 6.123 6.395 6.584

200 Lb, d 99 96 92

Lean, % 53.2 53.0 52.8

Yield, % NC NC NC

Caloric FCR variance from C-S Standard:

0.995 LO NE (NDF)

0.997 HI NE (Fat)

2.8502.9002.9503.0003.0503.1003.1503.2003.250

LO NE CS NE HI NE

Caloric FCR: Mcal NE/Lb Gain

Hanor Memo 2008-08, 70-280 lbs

Energy – Selecting the most Profitable Diet NE

Next Step:

Select Lowest Cost Energy ($ per Mcal NE) required to

Maximize Profit.

In Practice –

IF Target Carcass weight deliverable . . .

Simple (Lowest Cost, $/Mcal NE wins)

IF Target Carcass WT is a challenge . . .

Not as Simple (Not Lowest Cost Best Cost)

i.e. Energy level that allows Adequate Time.

5

Foundation Data: NE Caloric Gain for each Phase

1000

1500

2000

2500

3000

3500

4000

4500

18.5 42.5 69 101 147 192 235 268

Mean Body Weight - Phase, Lbs

Caloric FCR in Kcal NE : Lb Gain

Spreadsheet Requires 1 Critical Piece to Compute Cost of Various Diet Energies in meeting the Caloric Requirement for Gain.

Phase Caloric FCR Phase C‐S Standard Diet Marginal

Start End Mcal NE T Mcal NE Mcal/lb Lbs/Phase $/Ton $/Phase $/Phase

60 78 1.930 34.7 1.141 30.4 264.7 4.03 ‐

78 124 2.291 105.4 1.141 92.4 254.7 11.76 ‐

Ex.Optimum Profit Weight deliverable

1. ID Cheapest $/Mcal NE Diet2. Refine Estimate in Formulation 

program (Lowest $/Mcal Energy)

3. Review for Production Negatives

Principle:  Caloric FCRModest ADG compromise

High NE Diet, Fat 4.0%

1.224 28.4 297.3 4.22 +0.19

1.224 86.1 287.3 12.37 +0.61

Low NE Diet, NDF 16.5%

1.116 31.1 236.7 3.69 ‐0.34

1.116 94.4 226.7 10.70 ‐1.06

Energy – ID Approximate NE by Probing Diet Types

6

Energy – Fat Financial Value IF Feed Cost of Gain Driven

0.390

0.395

0.400

0.405

0.410

0.415

0.420

0.425

20 40 60 80 100

Feed

Cos

t of

Gai

n,

$/l

b

Fat Addition to C-S Diet, %

Fat : Corn 3.0 Fat : Corn 3.5 Fat : Corn 2.5

NRC 2012 ME Fat : Corn = 2.39

HAN 2012 NE Fat : Corn = 2.85

Hanor Memo 2012-00

Energy – Fat Financial Value IF Value Gain Creation (Summer)

0.390

0.395

0.400

0.405

0.410

0.415

0.420

0.425

20 40 60 80 100

Feed

Cos

t of

Gai

n,

$/l

b

Fat Addition to C-S Diet, %

Fat : Corn 3.5 Fat : Corn 3.5 Gain Created

Carcass Lbs Created due to Increased Carcass ADG, $0.85/lb

7

Energy – Selecting the most Profitable Diet NE

FAT Conundrum

FAT Addition used to deliver the Lowest Feed Cost of Gain, most of the Time.

What Happened ?

What IF Management is Fixated on a certain FCR ?

FCR Targets must be Dynamic to Optimize Profit

Normal: The Norm has been to use FAT in Diets because FCE is improved enough to reduce Feed Cost of Gain. FAT tended to provide Energy at a Cost that was < to Corn.

4.500

4.700

4.900

5.100

5.300

5.500

5.700

5.900

6.100

6.300

6.500

38 65 105 155 205 240 265

Body Weight, Lbs

Cen

ts /

Mca

l ME

HI FAT C-SBM

Fat:Corn Price, 2.65 : 1

2006 Internal Illustration

8

Continued – and the Outcome tended to be . . . that the

Best Nutritional FCR also Delivered Lowest Feed Cost

$45.00

$46.00

$47.00

$48.00

$49.00

$50.00

$51.00

$52.00

$53.00

$54.00

$55.00

Feed Energy LevelF

eed

Co

st,

$/P

ig (

38-2

80 l

bs)

HI-FAT C-SBM

2.000

2.150

2.300

2.450

2.600

2.750

2.900

3.050

3.200

3.350

3.500

Feed Energy Level

Fee

d :

Gai

n r

atio

Hi-FAT C-SBM

New Normal: After 2006, the Price relationship between Corn energy and Fat energy has become Turbulent. This New norm requires FCR Targets on Caloric basis for Nutritional reasons.

4.500

4.700

4.900

5.100

5.300

5.500

5.700

5.900

6.100

6.300

6.500

38 65 105 155 205 240 265

Body Weight, Lbs

Die

t C

ost

in

Cen

ts/

Mca

l M

E

HI FAT C-SBM

FCR Targets must be Dynamic to Optimize Profit(Things are getting Confusing for Non-Nutritionists)

Fat:Corn Price, 4.65 : 1

2006 Internal Illustration

9

Continued – In this Relationship the Best Diet FCR Delivered Highest Feed Cost

$48.00

$49.00

$50.00

$51.00

$52.00

$53.00

$54.00

$55.00

$56.00

$57.00

$58.00

Feed Energy LevelF

eed

Co

st,

$ /

Pig

(38

-280

Lb

s)

HI-FAT C-SBM

2.000

2.150

2.300

2.450

2.600

2.750

2.900

3.050

3.200

3.350

3.500

Feed Energy Level

Fee

d :

Gai

n r

atio

Hi-FAT C-SBM

Two FAT Sources: CWG vs A-V Blend Dose Study

Produced a Different Effects in Lactation (FCR), but

Same Positive Effects on Subsequent Reproduction

Deficit in Essential Fatty Acids was being Satisfied ?

Lipid Nutrition of the Lactating Sow: TURNING POINT – Revised Focus

Lipid Nutrition of the Lactating Sow: TURNING POINT – Revised Focus

Harmon Commentary

10

**

0

20

40

60

80

100

0 2 4 6 8 10 12 14

Pro

po

rtio

n o

f so

ws

bre

d, %

Days Post-Weaning

2.1 2.7 3.3

* **

70

75

80

85

90

95

100

0 20 40 60 80 100 FarrowPro

po

rtio

n o

f p

reg

nan

t so

ws,

%

Days Post-Conception

RESULTS: Linoleic acid (Omega 6)(Parity 3+ Sows)

RESULTS: Linoleic acid (Omega 6)(Parity 3+ Sows)

Linoleic acid (%) :

* P < 0.10

Purchase Considerations for Dietary Fat Sources Differ for Growth vs Reproduction

Purchase Considerations for Dietary Fat Sources Differ for Growth vs Reproduction

1Feedstuffs, May 2014.2NRC, 2012 (Table 17-4).

11

11

12

13

14

15

0 2 4 6

A-V blend

CWG

Control

50

60

70

80

90

0 2 4 6

Farr

ow

rate

, %

Farrow rate Subsequent litter size

Total p

igs b

orn

, n

Linear, P<0.001

Impact of Lipid (Level and Type) during Lactation on Subsequent Reproductive Performance

Impact of Lipid (Level and Type) during Lactation on Subsequent Reproductive Performance

Control vs. Added Lipid, P <0.05

Supplemental lipid level, %

12

Calculated Estimates of FAT NE for Early and Late Phases of Growth

Early 38-66 kg,

7.776

Late 79-107 kg,

8.058

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

9.50C

om

pu

te F

at N

E, m

cal/k

g