Pork producers are making their first profits in many years and hogs are expected to be in the black for the balance of the year. Economists, however, are warning producers not to expand production in an effort to take advantage of the profitability.
As an alternative to expansion, explore increasing profit potential with operational changes. For example, consider the inclusion rates of your dried distillers’ grains with solubles. It may provide an avenue to increase production margins.
With meat prices higher and corn and soybean prices more stable, you may be able to increase profits by replacing corn and soybean meal with DDGS.
DDGS’ yearly production has increased more than tenfold from 2002 to 2009 and surpassed 58 billion pounds last year. “The current situation of relatively low-priced distillers’ grains versus corn and soybean meal in Iowa, Nebraska and other parts of the United States is providing an incentive for livestock feeders to include these products in feed rations — up at profit-maximizing inclusion levels,” says Daniel O’Brien, agricultural economist, Kansas State University Extension.
O’Brien says DDGS prices in Iowa and Kansas are less than corn or soybean meal and have been since 2007, and are near the low in relation to soybean meal prices. He says that provides an opportunity for livestock producers to maximize profits.