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Implications of Growing Biofuel Demands on Northeast Livestock Feed Costs

Published online by Cambridge University Press:  15 September 2016

Todd M. Schmit ,
Leslie Verteramo  and
William G. Tomek
Todd M. Schmit
Affiliation:
Department of Applied Economics and Management at Cornell University in Ithaca, New York
Leslie Verteramo
Affiliation:
Department of Applied Economics and Management at Cornell University in Ithaca, New York
William G. Tomek
Affiliation:
Department of Applied Economics and Management at Cornell University in Ithaca, New York
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Abstract

The relationship between complete-feed prices and ingredient prices is estimated in order to analyze the effect of higher commodity prices on feed costs, with particular attention paid to the substitutability of corn distillers dried grains with solubles (DDGS). Using the historical price correlation between corn and DDGS, each $1 per ton increase in the price of corn increases feed costs between $0.45 and $0.59 per ton across livestock sectors. Marginal feed costs based on lower forecasted price correlations are reduced between $0.05 to $0.12 per ton across livestock sectors, but only for the dairy ration is the reduction statistically significant. Overall, DDGS cost savings are relatively limited and insufficient to offset the impact of other higher-priced feedstocks.

Keywords

biofuelscommodity pricesdistillers dried grains with solubleslivestock feed costs
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 38 , Issue 2 , October 2009 , pp. 200 - 212
Copyright
Copyright © 2009 Northeastern Agricultural and Resource Economics Association 

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