|
Description:
|
The U .S . has a history of producing surplus corn , but the current and projected growth
in ethanol production combined with strong feed and export demand is causing an
overall increase in corn utilization . Although livestock feeders are projected to remain
the largest users of corn , corn utilization can be reduced if ethanol co -products are used
to replace a portion of corn in finishing rations .
The objective of this study was to determine the economic trade -offs for cattle
feeders when facing higher corn prices and increasing supplies of ethanol co -products .
A stochastic partial budget model was used to determine the impact on the cost of gain
when ethanol co -products are substituted into rations at varying inclusion rates . The
model was built for all four major cattle feeding states : Texas , Nebraska , Kansas , and
Colorado . Ration scenarios were developed for each state , based on the research
results of feedlot nutrition and personal communication with feedlot operators . The
various scenarios were simulated to determine the impacts of changing corn prices ,
corn processing costs , cattle performance , and feeding and transportation costs for Wet
Distillerâ  s Grains with Solubles (WDGS ) on the key output variable , cost of gain .
The model results indicated when 15 percent WDGS (on a dry matter basis )
replaces a portion of corn and protein supplement , the simulated cost of gain is lower than the base ration scenario when the feedlot is located within 200 miles of ethanol
production . When feedlots are located more than 200 miles from an ethanol plant ,
Dried Distillerâ  s Grains with Solubles (DDGS ) can be fed to lower the cost of gain ;
therefore , ethanol co -products can be fed to help offset potential increases in corn
prices .
The partial budget model is a useful tool for livestock , corn , and ethanol
producers who are attempting to determine the impacts of ethanol expansion on corn
price and utilization . Policy makers can also benefit from the model analysis as they
face decisions in the future regarding ethanol and farm policy alternatives . |