Implications of Growing Biofuel Demands on Northeast Livestock Feed Costs

Todd Schmit, Leslie Verteramo and William G. Tomek

Agricultural and Resource Economics Review, 2009, vol. 38, issue 2, 200-212

Abstract: The relationship between complete-feed prices and ingredient prices is estimated in order to analyze the effect of higher commodity prices on feed costs, with particular attention paid to the substitutability of corn distillers dried grains with solubles (DDGS). Using the historical price correlation between corn and DDGS, each $1 per ton increase in the price of corn increases feed costs between $0.45 and $0.59 per ton across livestock sectors. Marginal feed costs based on lower forecasted price correlations are reduced between $0.05 to $0.12 per ton across livestock sectors, but only for the dairy ration is the reduction statistically significant. Overall, DDGS cost savings are relatively limited and insufficient to offset the impact of other higher-priced feedstocks.

Date: 2009
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Journal Article: Implications of Growing Biofuel Demands on Northeast Livestock Feed Costs (2009)
Working Paper: Implications of Growing Biofuels Demands on Northeast Livestock Feed Costs (2008)
Working Paper: Implications of Growing Biofuels Demands on Northeast Livestock Feed Costs (2007)
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