Time series livestock diet optimization: cost-effective broiler feed substitution using the commodity price spread approach

Othman Alqaisi (), Oghaiki Asaah Ndambi and Ryan Blake Williams
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Othman Alqaisi: Sultan Qaboos University
Oghaiki Asaah Ndambi: Wageningen University and Research
Ryan Blake Williams: Department of Agricultural and Applied Economics, Texas Tech University, Lubbock, TX 79409; Texas AgriLife Research -Lubbock

Agricultural and Food Economics, 2017, vol. 5, issue 1, 1-19

Abstract: Abstract Sustainable feed formulation (defined here as nutritional and economic feed optimization) is substantial in feed chain production from crop farmers to livestock producers. Diet formulation employing a static linear programming (LP) approach, which is widely used in trading firms and feed production facilities, does not allow for intertemporal flexibility. Our approach allows the interaction between feed components over time, considering the volatile global feed prices, thereby improving sustainability in feed formulation and feed availability. The objectives of this study were to (1) develop a multi-stage LP feed model, (2) demonstrate its potential use in broiler feeding, and (3) illustrate the impact of feed input price spread (variation) on the composition of broiler diets. Modeling resulted in reciprocal relationships between conventional feeds and byproducts at different rates. Based on the price spreads expressed as a percentage of DDGS (distiller’s dried grains with solubles) price compared to corn price, three positions of dietary switch were identified; corn-DDGS price spreads of higher than 94%, between 76 and 94%, and lower than 76% corresponding to limited/no inclusion, partial inclusion, and maximum replacement of corn by DDGS, respectively. Rapeseed meal inclusion was 4, 5, and 6% in the corn-based starter, grower, and finisher diets, respectively, and its potential to replace soybean meal was limited by its higher fiber content. Based on the simulated compound feed prices, the global broiler feed industry could gain 1.7 billion USD through improved resources planning.

Keywords: Multi-stage linear-programming; Broiler diet; Feed industry; Trading; Price spread; Byproducts (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1186/s40100-017-0094-9

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