Rising ingredient, energy (petroleum) and transportation costs are changing feed manufacturing practices across the U.S. pork industry. Feedmill and production unit managers are being challenged to evaluate the value of feed ingredients, feed form (mash, pellet, liquid) and particle size and cost of feed delivery.

Long-term goals should focus on ingredient purchasing and logistics (delivery and storage) and feed processing with the potential for improving animals' efficient use of feed. Feed ordering and delivery schedules have garnered new interest as the costs of fuel and the workforce climb.

Replacing cereal grains with alternative feed ingredients and byproducts may have specific storage requirements that affect their economy, the feasibility of use and the cost of manufacturing a palatable, quality feed product that allows the pigs to reach their genetic potential.

Swine producers looking for saving opportunities should focus their efforts in three areas:

  1. Least-Cost Formulation

    Least-cost formulation and alternative ingredients,

  2. Feed manufacturing to improve animal efficiency, and

  3. Lower feed delivery costs.

A swine producer's greatest opportunity to lower feed cost is through least-cost formulation of alternative ingredients. Least-cost formulation savings of as little as $2/ton would be difficult if not impossible to achieve through cost reductions or changes in the manufacturing process.

Pork producers who can develop a plan to incorporate alternative ingredients (distillers' dried grains with solubles, wheat midds, bakery byproducts, hominy feed) into their feed will experience feed cost savings.

However, the savings associated with alternative ingredients do not come without added costs and manufacturing challenges. Operations that develop processes to overcome these obstacles will realize the most feed savings.

On paper, alternative feed ingredient savings may look attractive, but producers, nutritionists, purchasing agents and feedmill managers must be prepared for the following challenges associated with new alternative ingredients:

  • Added analytical costs to develop and maintain a new ingredient matrix;

  • Additional receiving time and logistics management;

  • Slower batching times due to additional ingredients and poor flowing bins;

  • Reduced inventory of primary ingredients;

  • Reduced pellet mill throughput and higher electrical energy costs;

  • Changes in pellet quality, feed palatability, feed density and feed-flow characteristics; and

  • Additional labor costs in the receiving, batching and pelleting production areas.

These challenges affect all operations regardless of their size. Small producers may have more flexibility than larger production companies to make system changes to capture alternative ingredient price opportunities.

Manufacturing Savings

Each producer must ultimately determine how many resources they are willing to devote to managing these challenges.

Particle Size Reduction

Producers who have traditionally fed corn-soybean meal (SBM) diets should talk with their nutritionist and determine which ingredients and feeds have the greatest savings opportunities.

The simplest approach is to start with a single ingredient that can be used in all feeds.

The next step, which requires more planning and coordination, is to optimize the inclusion level across all diets to capture the greatest cost savings.

Since most alternative ingredients are byproducts of the food and biofuels industries, their nutrient content (energy, amino acids, minerals) and physical properties (moisture, density, flowability) will vary based on raw materials, processing equipment and plant design.

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Products such as distillers' dried grains with solubles (DDGS) have high nutrient variation (Table 1) due to differences in ethanol plant design and processing methods. Whereas, nutrient content of wheat middlings or bran is dependent on both the type of wheat (hard red winter, soft white, durum), as well as the efficiency of the flour extraction process.

Many of the challenges associated with alternative ingredients in a feed- mill can be overcome as long as all the employees working in the process are given sufficient time and resources to address these challenges. Operations that do not succeed may need to evaluate their implementation plan and determine whether enough resources are available to employees to achieve the desired outcomes.

Alternative ingredient savings are typically not fully recognized in most operations due to an unreliable ingredient supply, problems with inbound logistics and feed manufacturing constraints, such as poor flowability and limited bin space.

Pork producers who manufacture their own feeds can save money by using more individual small inclusion ingredients, vitamin and trace mineral premixes and Type A medicated feed additives. Depending on the medication, this may require the operation to obtain a medicated feed license and register with the Food and Drug Administration. This may also require the feedmill to upgrade their scaling and mixing equipment and change their manufacturing process to manage the lower inclusion level of these ingredients.

Finally, a company should use sow production and close-out performance as a gauge of the success of their alternative feed ingredient program. Producers should set a realistic alternative-ingredient saving goal each quarter based on the input of team members in different areas of responsibility in the company, such as animal production, nutrition, procurement, manufacturing and delivery, then evaluate the company's progress against these goals each month.

Manufacturing Savings

The feed manufacturing process should be viewed as a tool to improve the digestibility of feed and provide nutritionists with greater flexibility when formulating least-cost diets. Particle size reduction will improve the digestibility of cereal grains, which translates to improved feed conversion in swine, while pelleting offers greater flexibility in formulation and reduces feed wastage.

Particle Size Reduction

Research has demonstrated that particle size reduction of the cereal grain portion of starter diets from 1,000 to 500 microns improves performance. However, at 300 microns some negative effects on stomach mucosa have been observed.

Similar positive responses to particle size reduction have been observed in finishing pigs. A reduction from 1,000 to 400 microns has produced an improvement in feed conversion.

A regression equation (Figure 1) developed at Kansas State University from several research studies has proven to be a useful tool to predict feed savings in finishing pigs based on the particle size of the grain in the diet.

In the past, achieving a particle size of less than 400 microns has been a challenge; however, the demand for hammermills with high production rates has resulted in larger rotor diameter machines. These machines now operate with hammer tip speeds in excess of 24,000 ft./min. and can produce ground grain that is less than 400 microns. The drawback to grinding to less than 400 microns is that the feed must be pelleted in order for it to flow through feed bins and feed handling systems.

Another option for producers is to grind grain with a roller mill, which produces a granular product down to 600 microns that tends to have better flow characteristics, especially at a lower particle size.

The selection of equipment and the optimal particle size for individual production units must be based on herd health status, genetics, stage of production (sow, nursery, grow-finish), electrical cost, capital investment and type of diet (meal vs. pellet).

Pelleting

The pelleting process agglomerates ingredients that have different particle sizes, densities and flowabilities. Animal production companies often struggle with justifying the cost of pelleting and setting a pellet quality standard (percent fines).

The pelleting process is the most expensive and complicated process in the feedmill; however, the benefits of pellets include:

  • Decreased feed wastage;

  • Reduced selective feeding;

  • Decreased ingredient segregation;

  • Destruction of pathogens; and

  • Improved palatability.

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Nutritionists must determine if the higher cost of pellets can be offset with better animal performance and alternative ingredient savings.

Pelleting allows nutritionists to formulate diets with ingredients that have poor flow characteristics, including ground grain that is less than 600 microns.

The benefits of pelleting have been demonstrated in both nursery and finishing pigs, with up to an 8% improvement in average daily gain (ADG) and feed-to-gain (F/G) conversion. Once the decision to pellet feed is made, the next step is to develop a pellet quality specification that balances manufacturing cost, feed wastage and feeder management.

The cost of producing a pellet and pellet quality are inversely related. High-quality pellets with minimal fines cost significantly more to produce than pellets delivered to the farm that contain 20-30% fines.

Animal production groups are typically concerned about the percent of fines in the feeder, while feedmill operators monitor both pellet fines and pellet quality as measured by the pellet durability index (PDI).

Commercial feedmills will have a pellet screener that can remove the fines after the pellets have been cooled, and then re-pellet the fines to create a product with minimal fines when it leaves the feedmill.

Animals in an integrated system may receive feed that contains from 10-50% fines due to factors such as type of ingredients, particle size and pellet mill throughput. From a practical standpoint, research has demonstrated better feed conversion in nursery pigs that were fed screened pellets vs. a pelleted feed with 25% fines. Poorer feed conversion in growing and finishing pigs has also been observed as the percentage of fines increased up to 40%. Some research suggests that pigs fed 60% fines will have feed conversions similar to pigs fed meal diets, thus negating the benefit of pelleting.

In addition to pig performance considerations, there is also the problem of inconsistency in the amount of fines between feed deliveries, which results in the need for frequent feeder adjustment as farm personnel attempt to minimize feed wastage. This is a common complaint of animal production specialists.

Feed Delivery

Feed delivery cost can significantly impact total feed cost. In some cases, delivery cost may be higher than the manufacturing cost. Pork producers can reduce delivery cost in four areas: 1) insure that trucks are filled to the legal limit, 2) maximize the amount of feed on each load, 3) drive direct routes, and 4) look for backhaul opportunities.

Table 2 illustrates the potential savings that could be realized by either fully loading the truck or increasing the feed capacity of the truck up to 27 tons/load. Purchasing lighter- weight tractors and trailers will increase the capacity of feed that can be hauled on each load, but small changes such as reducing the amount of fuel and hydraulic oil, replacing metal lids with rolling tarps or using super single tires will also reduce the unit's weight.

Producers should determine if their feed delivery drivers (contract drivers or feed company) use the most direct route between the feedmill and the farm. The addition of as few as five extra miles per round trip delivery could add $0.10-0.15/ton in today's energy market.

Finally, arranging a backhaul of ingredients to the feedmill will defray or offset the cost of feed delivery.

Build a Quality Assurance Plan

Every swine producer — whether they are manufacturing or buying feed — should have a comprehensive quality assurance program that outlines policies, procedures and requirements related to ingredient quality, manufacturing controls, finished feed packaging and feed delivery.

A quality assurance program should include ingredient specifications, standard operating procedures, process standards, sampling schedules and standard reporting methods. Quality assurance programs can also incorporate food safety systems (HACCP), government regulations (cGMP's, BSE, bioterrorism) and ISO 9001 and 14001, as well as certification programs (Safe Feed/Safe Food). These programs should support the manufacturing and quality goals of the company and be customized to match the feedmill equipment and manufacturing process.

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Finally, the goals and quality assurance programs should be reviewed on a regular basis to insure the policies and procedures are relevant to the current manufacturing operation.

The sheer complexity of feed manufacturing and the potential savings associated with the process suggests that a team of individuals from different areas of responsibilities should evaluate the pros and cons of each opportunity as it relates to business goals, herd health status and genetics, design of the animal production system, ingredient price and availability and feedmill manufacturing capabilities. Companies that use a team approach to evaluate feed saving opportunities, within the context of the manufacturing process, will minimize the chance of costly, departmentalized business decisions.