Time series livestock diet optimization

cost-effective broiler feed substitution using the commodity price spread approach

Othman Alqaisi, Oghaiki Asaah Ndambi, Ryan Blake Williams

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Sustainable feed formulation (defined here as nutritional and economic feed optimization) is substantial in feed chain production from crop farmers to livestock producers. Diet formulation employing a static linear programming (LP) approach, which is widely used in trading firms and feed production facilities, does not allow for intertemporal flexibility. Our approach allows the interaction between feed components over time, considering the volatile global feed prices, thereby improving sustainability in feed formulation and feed availability. The objectives of this study were to (1) develop a multi-stage LP feed model, (2) demonstrate its potential use in broiler feeding, and (3) illustrate the impact of feed input price spread (variation) on the composition of broiler diets. Modeling resulted in reciprocal relationships between conventional feeds and byproducts at different rates. Based on the price spreads expressed as a percentage of DDGS (distiller’s dried grains with solubles) price compared to corn price, three positions of dietary switch were identified; corn-DDGS price spreads of higher than 94%, between 76 and 94%, and lower than 76% corresponding to limited/no inclusion, partial inclusion, and maximum replacement of corn by DDGS, respectively. Rapeseed meal inclusion was 4, 5, and 6% in the corn-based starter, grower, and finisher diets, respectively, and its potential to replace soybean meal was limited by its higher fiber content. Based on the simulated compound feed prices, the global broiler feed industry could gain 1.7 billion USD through improved resources planning.

Original languageEnglish
Article number25
JournalAgricultural and Food Economics
Volume5
Issue number1
DOIs
Publication statusPublished - Dec 1 2017

Fingerprint

commodity prices
Livestock
time series analysis
livestock
broiler chickens
Diet
Costs and Cost Analysis
feed prices
Zea mays
distillers grains
diet
Linear Programming
feed formulation
corn
linear programming
Meals
broiler feeding
input prices
feed industry
Brassica rapa

Keywords

  • Broiler diet
  • Byproducts
  • Feed industry
  • Multi-stage linear-programming
  • Price spread
  • Trading

ASJC Scopus subject areas

  • Food Science
  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics

Cite this

Time series livestock diet optimization : cost-effective broiler feed substitution using the commodity price spread approach. / Alqaisi, Othman; Ndambi, Oghaiki Asaah; Williams, Ryan Blake.

In: Agricultural and Food Economics, Vol. 5, No. 1, 25, 01.12.2017.

Research output: Contribution to journalArticle

@article{7496b01456284690b4f6bde9e95f5eb4,
title = "Time series livestock diet optimization: cost-effective broiler feed substitution using the commodity price spread approach",
abstract = "Sustainable feed formulation (defined here as nutritional and economic feed optimization) is substantial in feed chain production from crop farmers to livestock producers. Diet formulation employing a static linear programming (LP) approach, which is widely used in trading firms and feed production facilities, does not allow for intertemporal flexibility. Our approach allows the interaction between feed components over time, considering the volatile global feed prices, thereby improving sustainability in feed formulation and feed availability. The objectives of this study were to (1) develop a multi-stage LP feed model, (2) demonstrate its potential use in broiler feeding, and (3) illustrate the impact of feed input price spread (variation) on the composition of broiler diets. Modeling resulted in reciprocal relationships between conventional feeds and byproducts at different rates. Based on the price spreads expressed as a percentage of DDGS (distiller’s dried grains with solubles) price compared to corn price, three positions of dietary switch were identified; corn-DDGS price spreads of higher than 94{\%}, between 76 and 94{\%}, and lower than 76{\%} corresponding to limited/no inclusion, partial inclusion, and maximum replacement of corn by DDGS, respectively. Rapeseed meal inclusion was 4, 5, and 6{\%} in the corn-based starter, grower, and finisher diets, respectively, and its potential to replace soybean meal was limited by its higher fiber content. Based on the simulated compound feed prices, the global broiler feed industry could gain 1.7 billion USD through improved resources planning.",
keywords = "Broiler diet, Byproducts, Feed industry, Multi-stage linear-programming, Price spread, Trading",
author = "Othman Alqaisi and Ndambi, {Oghaiki Asaah} and Williams, {Ryan Blake}",
year = "2017",
month = "12",
day = "1",
doi = "10.1186/s40100-017-0094-9",
language = "English",
volume = "5",
journal = "Agricultural and Food Economics",
issn = "2193-7532",
publisher = "Springer Open",
number = "1",

}

TY - JOUR

T1 - Time series livestock diet optimization

T2 - cost-effective broiler feed substitution using the commodity price spread approach

AU - Alqaisi, Othman

AU - Ndambi, Oghaiki Asaah

AU - Williams, Ryan Blake

PY - 2017/12/1

Y1 - 2017/12/1

N2 - Sustainable feed formulation (defined here as nutritional and economic feed optimization) is substantial in feed chain production from crop farmers to livestock producers. Diet formulation employing a static linear programming (LP) approach, which is widely used in trading firms and feed production facilities, does not allow for intertemporal flexibility. Our approach allows the interaction between feed components over time, considering the volatile global feed prices, thereby improving sustainability in feed formulation and feed availability. The objectives of this study were to (1) develop a multi-stage LP feed model, (2) demonstrate its potential use in broiler feeding, and (3) illustrate the impact of feed input price spread (variation) on the composition of broiler diets. Modeling resulted in reciprocal relationships between conventional feeds and byproducts at different rates. Based on the price spreads expressed as a percentage of DDGS (distiller’s dried grains with solubles) price compared to corn price, three positions of dietary switch were identified; corn-DDGS price spreads of higher than 94%, between 76 and 94%, and lower than 76% corresponding to limited/no inclusion, partial inclusion, and maximum replacement of corn by DDGS, respectively. Rapeseed meal inclusion was 4, 5, and 6% in the corn-based starter, grower, and finisher diets, respectively, and its potential to replace soybean meal was limited by its higher fiber content. Based on the simulated compound feed prices, the global broiler feed industry could gain 1.7 billion USD through improved resources planning.

AB - Sustainable feed formulation (defined here as nutritional and economic feed optimization) is substantial in feed chain production from crop farmers to livestock producers. Diet formulation employing a static linear programming (LP) approach, which is widely used in trading firms and feed production facilities, does not allow for intertemporal flexibility. Our approach allows the interaction between feed components over time, considering the volatile global feed prices, thereby improving sustainability in feed formulation and feed availability. The objectives of this study were to (1) develop a multi-stage LP feed model, (2) demonstrate its potential use in broiler feeding, and (3) illustrate the impact of feed input price spread (variation) on the composition of broiler diets. Modeling resulted in reciprocal relationships between conventional feeds and byproducts at different rates. Based on the price spreads expressed as a percentage of DDGS (distiller’s dried grains with solubles) price compared to corn price, three positions of dietary switch were identified; corn-DDGS price spreads of higher than 94%, between 76 and 94%, and lower than 76% corresponding to limited/no inclusion, partial inclusion, and maximum replacement of corn by DDGS, respectively. Rapeseed meal inclusion was 4, 5, and 6% in the corn-based starter, grower, and finisher diets, respectively, and its potential to replace soybean meal was limited by its higher fiber content. Based on the simulated compound feed prices, the global broiler feed industry could gain 1.7 billion USD through improved resources planning.

KW - Broiler diet

KW - Byproducts

KW - Feed industry

KW - Multi-stage linear-programming

KW - Price spread

KW - Trading

UR - http://www.scopus.com/inward/record.url?scp=85039061166&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85039061166&partnerID=8YFLogxK

U2 - 10.1186/s40100-017-0094-9

DO - 10.1186/s40100-017-0094-9

M3 - Article

VL - 5

JO - Agricultural and Food Economics

JF - Agricultural and Food Economics

SN - 2193-7532

IS - 1

M1 - 25

ER -