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Dynamic interfeed substitution: implications for incorporating ethanol byproducts into feedlot rations

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  • Dong Hee Suh
  • Charles B. Moss

Abstract

This study examines interfeed substitution with a focus on the relationship between distiller’s dried grain with solubles (DDGS) and traditional feed grains. The dynamic linear logit model is used for the empirical analysis of interfeed substitution. The estimation results reveal that an increase in livestock and poultry outputs reduces the relative shares of corn and soybean meal to DDGS. The estimated adjustment rate indicates that the demand for feed grains is responsive in the short run with about 37% of the long-run response. This study also finds that the demand for corn and soybean meal remains inelastic even in the long run, showing the possibilities that livestock and poultry producers face high feed costs in response to an increase in the prices of corn and soybean meal. The pressures on feed costs can be alleviated by the substitutable relationship between DDGS and corn, but the substitution of DDGS for corn has a potential to provide livestock and poultry with different nutritional contents.

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  • Dong Hee Suh & Charles B. Moss, 2016. "Dynamic interfeed substitution: implications for incorporating ethanol byproducts into feedlot rations," Applied Economics, Taylor & Francis Journals, vol. 48(20), pages 1893-1901, April.
    • Handle: RePEc:taf:applec:v:48:y:2016:i:20:p:1893-1901
    DOI: 10.1080/00036846.2015.1109046
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    Cited by:

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    2. Alexandre Gohin, 2017. "On the direct, indirect and induced impacts of public policies: The European biofuel case," Working Papers SMART 17-09, INRAE UMR SMART.
    3. Alexandre Gohin, 2020. "The Land Use Impacts of the EU Biodiesel Policy: Assessing the Direct, Indirect and Induced Effects," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(2), pages 305-329, June.

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