Multiple approaches for diet formulation PIC Global Nutrition Team August 2016
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Multiple approaches for diet formulation
Multiple approaches for diet formulation
The value of body weight gain Diluting fixed costs Examples
Take home message ©PIC
Multiple approaches for diet formulation
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Growth performance basis
Maximize average daily gain (ADG)
Minimize feed efficiency (F/G)
Cost reduction basis
Minimize cost per kg of diet
Minimize feed cost per kg of gain
Profit maximization basis
Maximize income over feed cost (IOFC)
Maximize income over feed and facility costs (IOFFC)
Maximize income over total cost (live or carcass)
Optimum SID Lys, %
1.6 1.4
Multiple approaches for diet formulation 1.42
1.34
1.28
1.35
1.37
1.2 1.0
0.85
0.8
0.6 ADG
F/G
Maximize performance
Feed cost/unit gain
Minimize cost
Income Income Income over feed over feed over total cost and facility cost per lb cost produced
Maximize profit
Example of levels of standardized ileal digestible lysine to optimize different outcomes for PIC pigs (20- to 25-kg pig; PIC internal data). ŠPIC
The value of body weight gain
Fixed weight (long space) vs. Fixed time (short space)
Summer vs. Winter
In a production system marketing pigs at a fixed time, each extra unit of body weight gain have added value because time is a constraint.
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BMI AG Services, LLC
The value of body weight gain
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The value of body weight gain SID tryptophan to lysine ratio, % 15.5 $0
16.5
17.5
18.5
19.5
20.5
21.5
Lost $/pig
-$1 -$2 -$3 -$4
-$5 -$6 -$7
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Fixed weight Fixed time
Diluting fixed costs
Example: Feeder pig cost, $55
Initial weight: 20 kg
Final weight: 120 kg
Weight gain: 100 kg
Feeder pig cost per kg produced = 55/100= $0.55
A strategy that would make pigs to gain 103 kg instead, the feeder pig cost per kg produced = 55/103 = $0.534 (3% less)
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Example
Scenario 1: No added fat vs. Scenario 2: 3% added fat
Assumes each 1% added fat improves gain by 1% and F:G by 2%. This response can vary from system to system and by season.
Feeder pig cost (22.7 kg) = $55
Other costs (facilities/transport/medicines/vaccines/slaughter) = $14.56 per pig
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Calculations
Feed cost per pig
Income over feed cost per pig
Income over total cost per kg produced
Example
Assumptions ADG, kg F:G Days on feed Diet cost, $/kg
Scenario 1 Fixed time/ no added fat 0.816 2.800 112 0.229
Scenario 2a Fixed time/ 3% added fat 0.841 2.632 112 0.245
Assuming costs of soybean meal, corn, and choice white grease at $350/ton, $3.60/bushel (25.5 kg), and $0.68/kg, respectively.
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Example
Feed cost per pig:
No added fat, feed cost per pig = $58.60 (lowest feed cost
per pig)
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Added fat, feed cost per pig = $60.74
Income over feed cost:
Accounting for the value of added gain
Assuming market pig price of $1.21/kg
No added fat: $51.99 per pig
3% added fat: $53.24 per pig (more profitable)
Example 
Income over total cost:
[(market price per kg x 1000) - ((1000/market weight) x (feed cost per pig + other costs per pig + feeder pig cost))]/1000
[market price per kg - ((1/market weight) x (feed cost per pig + other costs per pig + feeder pig cost))]
IOTC1 = $0.0868 per kg live weight produced IOTCL2 = $0.0954 per kg live weight produced
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Absolute and relative economic differences between scenarios
Diet cost, $/kg Feed cost per pig, $/pig Feed cost per kg produced, $/kg Income over feed cost, $/pig Income over total costLive, $/ton
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Differences (Added fat – no added fat) Absolute Relative 0.016 + 7.0% 2.14 + 3.6% 0.004 + 0.6% 1.25 + 2.3% 8.60 + 9.9%
Decision making tool
Current vs. Scenarios to making decision
Take home message • Multiple strategies and approaches for diet formulation. • It is important to use an approach that takes into account the value of performance (i.e., ADG, F/G, yield) but also the fixed time or fixed weight nature of the system. • This approach can be taken for multiple areas from health to nutrition to management.
Thank you
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