Bargains and Rip-Offs: Assessing the Economic Value of Feedstuffs Using Market Prices

In many instances, nutritionists, feed manufacturers, dairy producers and their advisors need an estimate of what a feed is worth on a nutritional basis to facilitate the formulation of balanced diets and the purchase of appropriate and price competitive feedstuffs. Up until now, all methods used shared common flaws. We derived a maximum likelihood method that uses composition and prices of all feedstuffs traded in a given market to estimate unit costs of nutrients and break-even prices of feedstuffs. The method was programmed as a Windows application named SESAME. The software can be used (1) to rapidly and accurately identify commodity purchasing opportunities, and (2) to benchmark feed costs from nutrient requirements and nutrient unit prices. Examples are presented that contrast the pricing of important nutrients in the Southeast compared to the Midwest in mid December 2003.