Wednesday, November 10, 2010

Economics of Protein Supplementation

One of the principal costs associated with wintering cows is protein supplementation. Winter range, harvested forages, and crop residues for the most part, contain plenty of energy to meet the needs of gestating cows during the winter.

The protein content of these energy sources however, tends to be fairly low which will ultimately reduce intake and digestibility of these types of forages.

The feed products typically used to supplement ruminant livestock can be broken down into two major categories:

1) natural vs. non-natural protein sources
2) Low labor vs. high labor delivery methods

These two classifications cover the majority of feed supplements on the market and largely determine how they are priced.

Natural proteins consist of things like alfalfa, oil seed meals (soybean, cottonseed, sunflower), corn by-product distillers grains, and the like. Non-natural protein are largely formulated to include urea.

Typically, natural proteins used in supplementing beef cows are more efficient and usually lower cost than urea-based supplements. However, natural protein source typically require more labor and equipment to deliver than urea-based products.

In essence, you are paying for the convenience factor with certain types of protein supplements.

The other thing you have to watch out for with protein supplements is sticker shock. Some supplements can seem very expensive on a per ton basis, but actually are relatively cheap on a per pound of crude protein (CP) basis because you don't have to feed very much of the bulk material to meet dietary requirements.

Therefore, it is essential that a manager knows how to calculate the cost of protein on a per pound basis so you can assess the convenience factor.


To calculate cost per pound of crude protein for a feed supplement use the following formulas:

A) Conversion from one ton of bulk product to pounds of protein in that ton

Pounds of CP in bulk product = 2000lbs. x % crude protein

If we take soybean meal (SBM) as an example, SBM contains about 46% CP and costs about $300 per ton on average over the last year-and-a-half or so.

2000 lbs. of SBM x .46 (% CP) = 920 lbs. of protein

B) Then we convert cost per ton to cost per pound of CP by dividing cost per ton by pounds of CP:

$300 per ton = $0.32 per lb. of protein
920 lbs. of protein

That's it!! You can make this calculation with any type of protein supplement.

Now you can compare the cost of different supplements based on a common denominator so you are comparing apples to apples.

Of course, prices change frequently on a per ton basis, which is going to change cost per pound of CP, so a person needs to recalculate these everytime they go to buy bulk product.

When you calculate the cost per pound of CP for a variety of supplements, then you have to assess how much you are willing to pay for convenience.

As an example, alfalfa is a tremendously cheap source of protein for livestock on a per pound of CP basis, however, after you figure in the cost of delivering the product to livestock, it may or may not look all that cheap anymore. On the other hand, lick tubs are really easy to deliver, but does the convenience justify the cost? You have to decide.

Table 1 shows the cost comparison of common protein supplements on a cost of CP basis using average per ton prices.

Product Cost per lb. of CP
Corn by-product distillers grains $0.25

Alfalfa $0.30

Soybean meal $0.32

Cottonseed meal $0.27

Sunflower meal $0.44

Commercial range cake $0.68

Lick Tubs $1.87

Now, you make the call on what works for you and what doesn't.

Thank You and Have a Great Day!!

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