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When Corn is Cheap: Should I Still Feed Ethanol By-Products?

When corn is cheaper, this is a familiar question. Many producers are under the impression that if DDG or wet byproducts are higher priced than corn, they are not a good buy. Actually, they can still save money on their total feed cost by using byproducts, because they are going to use a lower inclusion balancer instead of a 40% finisher fed at 1-2 lb/head/day. If your customer insists on dropping distillers, that is his decision, I am just providing you the economic facts in this scenario.

I ran some projections using corn, hay and 40-20 vs corn, hay, WDG and balancer. I looked at $3.20 corn down to $2.50/ bushel. I used modified distillers grain at a constant price of $65/ton, which is equal to about $3.40 corn. WDG was used at 20% of the diet dry matter in both cases.

Below is a table showing costs for this comparison. It was run using 900-lb steers fed to 1500 lb. Obviously, purchase price will affect cost of gain and breakeven, but this gives you a general idea of the differences.

Conv WDG Conv WDG
Corn Price $3.20 $3.20 $2.50 $2.50
ADG 4.07 4.07 4.07 4.07
F/G 689 689 689 689
Cost of Gain $76.72 $68.47 $67.61 $61.51
Breakeven/cwt $103 $100 $99 $97
Total Feed $ $345 #297 $292 $256

As you can see, the advantage is $48 with $3.20 corn and $36 with $2.50 corn. The rest of the ingredient costs were hay at $80 and supplements at approximately $500/ton. Each situation needs to be evaluated on its own merit, but hopefully this gives you some figures to help your producers make a wise decision.

NN 09-12-16 Cheap Corn Feed Ethanol By-Products 2019

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