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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 commodity feedstock prices are estimated to analyze the effect of higher commodity prices on feed costs, with particular attention towards the price effects and substitutability of corn distillers dried grains with solubles (DDGS). Assuming the historical positive correlation between corn and DDGS prices, each $1/ton increase in the price of corn increases per ton feed costs between $0.45 and $0.67 across livestock sectors. A negative price correlation would offset some of the cost increases, but under most scenarios feed costs are expected to be at or above those experienced in 2007.

Suggested Citation

  • Schmit, Todd M. & Verteramo, Leslie J. & Tomek, William G., 2008. "Implications of Growing Biofuels Demands on Northeast Livestock Feed Costs," 2008 Conference, April 21-22, 2008, St. Louis, Missouri 37595, NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
  • Handle: RePEc:ags:nccest:37595
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    References listed on IDEAS

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    1. Amani Elobeid & Simla Tokgoz & Dermot J. Hayes & Bruce A. Babcock & Chad E. Hart, 2006. "Long-Run Impact of Corn-Based Ethanol on the Grain, Oilseed, and Livestock Sectors: A Preliminary Assessment, The," Center for Agricultural and Rural Development (CARD) Publications 06-bp49, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    2. Hadrich, Joleen C. & Wolf, Christopher A. & Roy Black, J. & Harsh, Stephen B., 2008. "Incorporating Environmentally Compliant Manure Nutrient Disposal Costs into Least-Cost Livestock Ration Formulation," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(01), pages 287-300, April.
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    5. Beghin, John C. & Dong, Fengxia & Elobeid, Amani & Fabiosa, Jacinto F. & Fuller, Frank H. & Hart, Chad E. & Kovarik, Karen P. & Tokgoz, Simla & Yu, Tun-Hsiang & Wailes, Eric J. & Chavez, Edward & Woma, 2007. "FAPRI 2007 U.S. And World Agricultural Outlook," Staff General Research Papers Archive 12805, Iowa State University, Department of Economics.
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    6. Ferris, John N., 2006. "Modeling the U.S. Domestic Livestock Feed Sector in a Period of Rapidly Expanding By-Product Feed Supplies from Ethanol Production," Staff Papers 11628, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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    Cited by:

    1. Cai, Xiaowei & Stiegert, Kyle W., 2014. "Market Analysis of Ethanol Capacity," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 17(1).
    2. 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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