This southern Minnesota producer chips away at his highest input costs — sow and pig diets.

One of the best in the nation” is how AgStar's Mark Greenwood describes Bob Taubert's risk management program.

Taubert, managing partner of New Horizon Farms headquartered in Pipestone, MN, approaches risk management with a systematic discipline, which he says may be a throwback to his civil engineer training from the University of Minnesota. Details, fractions and benchmarks are important to him.

He uses pigs weaned/sow/year as a primary measure of productivity, along with adjusted 21-day litter weight, percent sows bred by Day 7, wean-to-first service interval, farrowing rate and sow mortality. He's constantly challenging conventional thinking to squeeze maximum performance from New Horizon Farms' 11,000 sows.

Thinking back to “when things started getting crazy” (late August, early September 2006), Taubert first challenged the recommendation that feed should be ground to 700-750 microns.

“We have pushed that down to around 400 microns, leaning toward a little bit smaller, if possible. The finer the feed particle size, the easier it is for a pig to digest and absorb the nutrients,” he argues. “We have been able to lower feed conversion by doing that.” Granted, all credit doesn't go to micron size, because other dietary changes were also made.

Concerns about ulcers with finer grinding didn't materialize. “One reason may be that the finer-ground corn did not have an inordinate amount of ‘fines’ (i.e., corn was very consistently ground),” he says. “And monitoring the conditions of the rolls in the Roskamp roller mills has been increasingly important.”

The inclusion of alternative ingredients such as distiller's dried grains with solubles (DDGS) and bakery meal increased the fiber level, and are slightly higher in micron size than the finely ground corn.

Another move to economize gestation and lactation diets was the addition of 30% DDGS and initiating a step-up, step-down program of DDGS inclusion in finishing rations. “Eighteen months ago, we weren't using any DDGS. Last week, alone, we used 20 semi-loads,” he explains. “That's anecdotal to how much things have changed as far as feeding these animals more economically. We've actually dropped our overall corn usage by nearly 25%.”

All DDGS products are sourced from a single plant, which is monitored for quality variation. In addition, DDGS is a good source of available phosphorus, an additional cost savings.

Bakery byproducts currently make up about 5% of all rations. “To be quite honest, this has not resulted in a savings in corn price, but it hasn't been a cost either. Part of our strategy is displacement of corn, thereby making the corn we do own last longer. My view was I was buying bakery byproducts against the current cash price of corn vs. some unknown, but anticipated higher price in the future. It's somewhat of a backwards risk management,” he explains.

Taubert also quit using choice white grease as an energy source in rations. “Historically, we were paying 11-13 cents for fat; today, choice white grease trades for 42 cents or higher, so we literally can't afford the energy source. We were able to take the fat out, decrease the micron size and keep about the same feed conversion as we had with added fat,” he says.

Additionally, he has ratcheted down the “old standard amino acid ratios,” which allows him greater flexibility to use synthetic amino acids in diets and take out a little soybean meal, resulting in another cost savings.

New Horizon Farms owns and operates four, 1,200-head research barns, which are operated under the direct supervision of Kansas State University (KSU) nutritionists. “Based on trial results, KSU nutritionists formulate the nutritional requirements for our pigs, in our environment. Anybody can give you a growth and intake curve for their pigs, but can you duplicate that in your environment and repeat it day in and day out?” Taubert asks.

Cargill Animal Nutrition staff serves to challenge the KSU baseline nutri-tional guidelines and provide laboratory services “to make sure we are really feeding what we think we are feeding,” he notes. Cargill is also responsible for diet reformulation, ensuring that the diets are “best cost” for a given set of nutritional specifications.

Taubert also buys soybean meal from Cargill. So, rather than using the 46.5% guaranteed protein level, laboratory testing might confirm it at 47.5% protein. “We can then formulate the ration using 47.5%, which is not a lot of cost savings, but we're able to capture something that we otherwise might not.”

A third nutritional consultant, Noel Williams with PIC, advises on sow diets. “We feel all three nutritional advisors help us maximize our feeding program. They challenge each other, ask tough questions and help us get changes implemented,” he explains. “I think I have frustrated them somewhat by asking and pushing to do things for which there is not a lot of data. This is where the research farm has been critical.”

Mill Ownership

Taubert also believes owning a feedmill is a huge advantage. “The biggest thing is having control of the feed quality. That's not a statement about other millers. It's just that I have control over what goes in and what comes out. I can change things whenever I want. I don't have to ask 25 other customers whether we can change DDGS suppliers, for example,” he says.

“I like being in the market and knowing what the market is for everything, because opportunities present themselves, and I'm there to take advantage of them. If I didn't own the mill, I don't know how I'd keep track of it,” he adds.

“Vitamins are a good example. In part due to the temporary closing of manufacturing plants in China ahead of the Olympics, vitamins, particularly vitamin E, have increased in price quite dramatically. Since we were in the market for vitamins, we were able to buy 8-10 months worth ahead at a nearly constant price. Now the price has more than doubled,” he says.

All corn for New Horizon Farms is purchased from local farmers, which has made Taubert a student of the corn market. “I think we've done a very good job of understanding the market, understanding our costs, and how to use the futures market to mitigate some risk,” he says.