The Rising Cost of By-Products for Fed Cattle Rations

February 11, 2019

By Jeff Pastoor, Beef Technical Consultant

The #1 question my fellow consultants and I have been hearing is “why are by-product prices so high and what can we do about it?” Low gas prices and rising corn prices have forced ethanol plants to reduce production, reducing the supply of distillers grains. At the same time, increased livestock numbers in both the U.S. and around the world have increased the demand for supplemental protein. So, we are in a situation of tight by-product supply and strong demand leading to higher prices.

With the high price of by-products, some feeders have considered totally eliminating them from their rations. Your cattle still need the right amount of protein to support their gain potential, so don’t be tempted to cheat them by going without proper protein levels. A finishing ration with 11% protein will support .8# less daily gain than a ration with 12.5% protein – the added days on feed and the lost feed efficiency would increase your total cost of gain by over 12¢/lb.

To meet the protein needs that will support the gain the cattle are capable of will require another source of protein. This could be your hay, but will most likely be whatever by-product you can purchase cost-effectively.

There are many different by-products and your buying decisions should be made based on their costs and nutrient levels. None of the by-products are a good corn replacement at their current costs, so we need to focus on their protein levels. Different by-products have different protein levels and different dry matter levels which all affect their value. We can help you make these comparisons so that you can purchase the best feed for your operation.

For example:

  • On a dry matter basis, gluten feeds have about 30% less protein than distillers grains so they should be priced accordingly.
  • If you are feeding less wet by-products turnover and spoilage could be a problem; dried distillers grains will have less shrink and spoilage than modified or wet distillers grains.
  • MWDGs are 50% moisture, so if DDGs cost less than 2X the cost of MWDGs they are likely the better buy.
  • DDGs are 25% crude protein, so they should cost about half as much as HiPro Soybean Meal. If SBM is less than 2X the cost of DDGs, SBM is likely the better buy.

Non-protein nitrogen is a very cost-effective protein source right now, and QLF is the best way to bring NPN into your rations. For the best rumen efficiency NPN should be between .8% and 3% of the ration; with current feed costs, we are balancing rations to the higher end of that range to get the best cost of gain.

Using more NPN will also reduce the amount of by-product that you need to feed. If you have your own home grown corn in the bin you will be buying fewer by-products and this will significantly reduce your out of pocket feed expenses and improve your cash flow.

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