Determining the Value of Novel Feedstuffs in Imperfect Markets, Taking Lupinus albus as an Example

Michael Friedrich Tröster (), Markus Heinz and Leonhard Durst
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Michael Friedrich Tröster: Agricultural Education Center Triesdorf, Markgrafenstraße 12, 91746 Weidenbach, Germany
Markus Heinz: Agricultural Education Center Triesdorf, Markgrafenstraße 12, 91746 Weidenbach, Germany
Leonhard Durst: Fakultät Landwirtschaft, Lebensmittel und Ernährung, Hochschule Weihenstephan Triesdorf, Markgrafenstr. 16, 91746 Weidenbach, Germany

Agriculture, 2023, vol. 13, issue 4, 1-15

Abstract: Feed production and utilization are significant contributors to agricultural economic performance. Upon the market entry of new feedstuffs, livestock farmers are challenged to determine their price worthiness. In addition, transparent price formation is hampered under the conditions of new and often imperfect markets, thereby negatively impacting trade and impeding the development of sustainable markets. Therefore, this study proposes a decision support system that enables the effective valuation of novel feeds, such as white lupin ( Lupinus albus L.). The proposed system is based on a linear optimization model that, by parameterizing the pricing assumption of novel feeds, determines their substitution value relative to conventional feeds. Notably, the substitution value of white lupin as a feed was found to vary significantly by animal species, production process, performance level, and cultivation year. However, with substitution values up to €557 t −1 , the value of white lupin was frequently far higher than the rarely available market prices (€270 t −1 , as of 12/2021), suggesting that white lupin is a novel feed that is grossly undervalued due to imperfect market conditions. Overall, the proposed system can be used for objective pricing in these cases.

Keywords: substitution value; lupin; feed; optimization; linear programming; imperfect market (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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