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Implications of Growing Biofuels Demands on Northeast Livestock Feed Costs

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  • Schmit, Todd M.
  • Verteramo, Leslie J.
  • Tomek, William G.

Abstract

The relationship between complete-feed prices and ingredient prices are estimated to analyze the effect of higher commodity prices on feed costs, with particular attention to the substitutability of corn distillers dried grains with solubles (DDGS). Using an historical positive price correlation between corn and DDGS, each $1/ton increase in the price of corn increases feed costs between $0.45 and $0.59 per ton across livestock sectors. Assuming a negative long-run price correlation reduces these marginal feed costs to between $0.11 and $0.36. Overall, DDGS cost savings are relatively limited and insufficient to offset the impact of other higher-priced feedstocks.

Suggested Citation

  • Schmit, Todd M. & Verteramo, Leslie J. & Tomek, William G., 2007. "Implications of Growing Biofuels Demands on Northeast Livestock Feed Costs," Working Papers 127011, Cornell University, Department of Applied Economics and Management.
    • Handle: RePEc:ags:cudawp:127011
    DOI: 10.22004/ag.econ.127011
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    Cited by:

    1. De Matteis, Maria C. & Yu, T. Edward & Boyer, Christopher N. & DeLong, Karen L. & Smith, Jason, 2018. "Economic and environmental implications of incorporating distillers’ dried grains with solubles in feed rations of growing and finishing swine in Argentina," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(6), July.
    2. Cai, Xiaowei & Stiegert, Kyle W., 2014. "Market Analysis of Ethanol Capacity," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 17(01), pages 1-12, February.
    3. Johnson, Matthew & Yu, T. Edward & Griffith, Andrew P. & Jensen, Kimberly L. & Cho, Seong-Hoon, 2015. "Regional Dynamic Price Relationships between Distillers Dried Grains and Feed Grains," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196900, Southern Agricultural Economics Association.

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