AB Agri researches insect-derived poultry, pig feed protein options

A project focusing on using insect-derived feed protein as a replacement for expensive soybean meal and fishmeal in poultry and pig diets is being spearheaded by the parent company of British poultry and pig compound feed manufacturer ABN, AB Agri.
The project involves entomologists, biochemists and nutritionists, combining the expertise within ABN with that of scientists at the Food and Environment Research Agency. Insect larvae will be grown on organic waste materials, then processed for use in animal feeds and initially evaluated in poultry. “With global protein supply currently struggling to keep up with worldwide demand, and protein prices sky-high this year as a result, there’s a real need to develop new, sustainable alternatives,” said ABN Technical Director Angela Booth. “This project is an exciting opportunity to see if the highly digestible protein in insect larvae could help meet that need. As a bonus, the organic waste substrate is reduced in mass by around 50 percent, and can be used as a valuable fertilizer.”
The aim is to have a viable pilot-scale production system up and running by the end of the three-year project, which is jointly funded by AB Agri and the Technology Strategy Board. In addition to overcoming the technical production challenges, a strong focus will be placed on evaluating the feed’s nutritional value and its suitability for use as an animal feed, especially in relation to consumer acceptability.

Europe feed makers, farmers struggling with high grain costs

European animal feed makers are saying they have limited options when it comes to making substitutes to cope with rising global grain costs, and farmers dealing with increased feed costs say they may be forced to reduce their herds as meat prices fail to keep pace, according to reports.
Global corn and wheat prices rose 50 percent and soybeans roughly 20 percent in the six weeks to the end of July as the U.S. entered a drought that continues to present challenges. "The animals need energy, and I don't think that the carbohydrates they get from grains could be replaced with anything else," said Sam Millet, a researcher at the Belgium Institute for Agricultural and Fisheries Research. "I don't think we can grow plants with the same content of digestible energy as grains."
Grains usually account for more than 50 percent of animal feed formulas for poultry, pigs and cattle, and protein from oilseeds such as rapeseed and soybeans makes up another 25 percent. The rest consists of minerals and additives. Farmers are looking for ways to alter their formulas, but say they have little to work with. "The use of (byproducts) is limited and linked to availability," said John Brennan, director of research and development for animal nutrition at Nutreco. "In North America where we have growth of the ethanol industry, we have increased availability of distilled grains and we use it as feedstock." According to Brennan, the biggest savings have come from additives — mixes of vitamins, minerals, emulsifiers and some chemicals. "That's where the revolution is taking place," he said. Some blends have led to 10 percent cost savings for ruminants' feed, but savings for poultry and pig feed were much lower, said Brennan.
Farmers have said it's time to pass on the costs to consumers, or they risk having to shut down. "The price of feed has risen by more than the price of pork," said Christiane Lambert, vice president of France's largest farm union FNSEA. "The risk is that some of the producers will go out of business."

Industry report offers optimistic future for livestock, poultry feed

Joel G. Newman, president and CEO, American Feed Industry Association, released the study Future Patterns of U.S. Feed Grains, Biofuels, and Livestock and Poultry Feeding today at the Federation of Animal Science Societies Joint Annual Meeting in Phoenix. The study was presented in tandem with Robert Wisner, retired University Professor Emeritus, Department of Economics, Iowa State University. Wisner was principal investigator for the study.
According to the report, the authors “reviewed recent trends in the U.S. and the global bioenergy, grain, feed, and livestock industries. The report focuses on the impact of development of the U.S. bioenergy industry on grain and feed availability for the livestock sector as well as industry profitability, production, efficiency, demand, and the future of the feed livestock sector.”
Some of the observations made by the report include:
• In the next three to seven years, supplies of corn should be adequate, if U.S. corn yields return to their longer-term upward trend.
• Uncertainties that need to be monitored by the feed-livestock sector beyond 2020 are 1) China’s demand for corn; and 2) the possibility of a second-stage growth in corn processing for biofuel.
• The primary way that the poultry and livestock sectors will adjust to biofuels expansion and international competition will be by finding and using more efficient cost-reducing production methods.
• Pork will most likely continue its growth if U.S. corn yields are close to normal for the next three to seven years.
• If ethanol demand slows and U.S. corn yields increase, the dairy industry should be able to return to long-term expansion as well as to increases in efficiency and productivity.
• An increase in beef cow numbers and beef production can be expected if feed supplies are available at a reasonable cost. However, other factors will likely put pressure on the industry to increase production and feed conversion efficiencies.
• The production of lower oil and de-oiled DDGS will require research on how to use these products most efficiently.
Additional areas covered in the report include Food-Population Issues and Possible Climate Change Issues, among others.
The Institute for Feed Education and Research provided a grant on behalf of the American Feed Industry Association to the Council on Food, Agricultural and Resource Economics in order to conduct this review. 

Egg Industry Center reports on February feed prices, production costs

A March report on feed prices issued by the Egg Industry Center at Iowa State University documents that U.S. average feed costs dipped below $200 per ton in February, with an average of $195 per ton. Prices ranged from $173 per ton in the Midwest to $223 per ton in California.
Production cost in February was 58.3 cents per dozen, with a range of 53.9 cents per dozen in the Midwest to 64.3 cents per dozen in California. Feed represented 60.7% of nest run costs.
The report was authored by Marco Ibarburu and Don Bell.

Vietnam to regulate feed industry

According to reports, the Vietnamese government will begin regulating animal feed costs. Domestic market prices for feed are 10% to 15% higher than in nearby countries.
The Viet Nam Feed Association claims costs are higher due to the need to import half of the raw materials needed in feed production. With no domestic competition, foreign companies charge higher prices.The association says the country imports 3.7 million tonnes of grain to produce feed. The industry is asking for government help to encourage investment in raw material production.

DDGS use may save farmers money

Danisco Animal Nutrition has released research findings that indicate pig producers can save around US$5/ton in feed costs using diets containing distillers dried grains with solubles (DDGS). This savings, according to the company, does not risk animal performance.
In a trial conducted at the University of Illinois, combining a new-generation phytase (Phyzyme XP) with a xylanase enzyme (Porzyme 9302) in corn-based pigs diets containing 20% corn, DDGS significantly improved digestible energy by 5.6%, ileal amino acid digestibility by 4% to 8% and increased phosphorus digestibility from 22% to 51%.
In a trial conducted at the University of Kentucky, adding the xylanase and phytase combination resulted in net savings in feed costs of about US$5/ton. Performance of pigs fed a corn-based diet containing 20% corn DDGS reduced in both digestible energy and available phosphorus and supplemented with the enzyme combination, was at least equivalent to the performance of pigs fed a more expensive standard diet.
Danisco said that while DDGS is potentially a cost effective and valuable feed ingredient, there are certain anti-nutritional factors which can limit its use in pig feed.

Slow harvest raises prices

A rain-slowed harvest in the U.S. is increasing feed costs, as corn closes in on $4/bushel and soybeans at nearly $10/bushel, say reports. This further hurt producers who were already suffering from weak demand for meat during the economic downturn.
Corn, with a $1/bushel increase, is expected to impact chicken farmers. A J.P. Morgan analyst cut earnings estimates for Tyson Foods because of the higher grain prices.
The U.S. Department of Agriculture estimates the corn harvest is 22% behind the five-year average for corn acreage harvested at this time. Cool, rainy weather is blamed for the lag on what was to be a record corn yield. More wet weather is predicted.
Most significantly impacted has been Illinois, which only has 6% of its crop harvested. Other impacted states include Missouri, Tennessee and Kentucky, which all are 35% behind typical averages.

Feed wheat price cuts affect UK egg farmers

Noble Foods and Fridays, both UK food packers, have cut rates on the back of falling feed prices. At the end of August, UK feed wheat was down to £84/metric ton, a drop of £13/metric ton on the month, and of £34/metric ton year-on-year. Wheat prices have declined due to the UK Department for Environment, Food and Rural Affairs' announcement of a 150% rise in on-farm wheat stocks, as well as continued reports of better-than-expected EU harvests.
In response, the chairman of the British Free Range Egg Producers Association, Tom Vesey, expressed his disappointment in the price cuts, but was able to understand why it had happened.
Noble has reduced payments by 3 pence/dozen on very large eggs, 3 p/dozen on large eggs and 1 p/dozen on medium eggs, which equate to a weighted average cut of 2 p/dozen. The same cuts were announced by Fridays.
Vesey, though, pointed out that price cuts would deter the establishment of new producers, or prohibit the expansion of existing producers.
He emphasized a need for expansion within the free-range egg sector to help fill the gap created by the ban on conventional cages to be established in January 2012, and stressed it was one issue packers should consider before cutting producer payments.

Bill on climate courts controversy

Senators and farmers' unions in the U.S. are arguing over climate change legislation which was passed by the House in June, the Associated Press reported.
The legislation, over which the Senate is expected to vote this fall, would cap emissions from major industrial sources, including power plants, factories, refineries and electricity and natural gas distributors. Emissions from agriculture, however, will be excluded.
The bill is being opposed because the steep rise in fuel and fertilizer costs would eat into farmers' and ranchers' profits. However, the bill's supporters argue that the offset provisions built into the bill, which allow companies to meet their pollution targets by investing in offset projects such as methane-capturing farms, will more than make up for the losses suffered by the farmers.
According to a USDA report, the 1-7.2% loss in income that farmers would suffer due to an increase in energy costs and, therefore, fertilizer which requires a large amount of energy to be produced, will be compensated by tens of billions of dollars granted for projects to reduce greenhouse gases.

Sanderson Farms posts Q3 gains

Sanderson Farms Inc. reported higher profits and sales for the third fiscal quarter ended July 31, 2009, compared with the same quarter last year. Lower feed costs and higher chicken prices contributed to the profitable quarter.
The firm's net income for the quarter was $43 million, or $2.09 per diluted share, compared with a net loss of $3.6 million, or 18 cents per diluted share, during the third quarter last year. The net sales figure for the third quarter was $504.8 million compared with $466.9 million a year earlier.
"In addition to improved market conditions, our operations continued to perform well during the third quarter," said Joe F. Sanderson, chairman and CEO of Sanderson Farms. "Our Waco, Texas, facility has moved to full production and continues to operate well. We are also pleased to report that construction is underway at the hatchery and feed mill sites for our new Kinston, North Carolina, complex, and we will break ground at the processing site in September."

How reduced cereal grain quality impacts feed

All grains produced locally in Saskatchewan, Canada this year are at risk for frost, and if not frost, sprouting because of the late harvest due to an exceptionally cool growing season. But feed grains that producers buy that may have been frozen, harvested immature or sprouted, may provide an opportunity as these crops can provide good feed quality for pigs, says Dr. Denise Beaulieu in Farmscape.
"Using and being on the lookout for low-quality grains is a good option for producers. Using byproducts and alternative crops is another way that they can decrease their feed costs," said Dr. Beaulieu, a research scientist with the Prairie Swine Center.
The scientist states that freezing and or sprouting of grains doesn't always decrease feed quality as such grains can be a very good source of both energy and protein for pigs. But that said, producers need to be looking for mould and mycotoxins, particularly if the grain is harvested immature or wet. As a result, she recommends that grain be tested.
One of the major challenges in using damaged grain, Dr. Beaulieu says, is that its digestibility is difficult to predict. "Looking at predictive equations will be something that we are looking at in our research to see if they are applicable to this year's crops," she says in the article.

NCC opposes 15% ethanol blends

The Environmental Protection Agency should resist the ethanol industry's demand that it legalize blending of ethanol into motor gasoline up to 15%, according to the National Chicken Council. NCC warned that the higher blend could cause damage to cars and trucks built to run on a maximum of 10% ethanol and would create additional volatility in the grain market.
Growth Energy, a group led by Poet Energy, the nation's largest ethanol distiller, petitioned EPA to raise the legal limit from 10% to as much as 15%, asserting that the higher blend would make no difference to operation of the millions of cars and trucks in the U.S. that run on conventional fuel.
EPA said its consideration of the Growth Energy petition would be based on whether there is adequate reason to believe that more ethanol in fuel would not cause harm to engine components, particularly pollution control equipment. NCC argued that pending studies must be completed before a final decision can be made.
Growth Energy and other ethanol backers claim that the 10% limit effectively caps the amount of ethanol they can sell, calling it the "blend wall."
Comments to EPA on the Growth Energy petition are due no later than July 20 and can be made through the government's official portal at www.regulations.gov.

Flock study results released

Don Bell of the University of California, Riverside, has circulated Part 13 B of the National Flock Performance Study.
This report considered income over feed costs and pullet depreciation for flocks with a first-cycle length ranging from 47 to 91 weeks as the extremes.
Data was collected from 11 companies participating in the National Flock Performance Study. Seven of the 11 companies applied either non-molt or single-molt programs. The contribution margin was calculated from the difference between revenue, using standardized prices for grades, minus feed cost and pullet depreciation. This value was multiplied by 52 weeks.
The contribution margin ranged from $3.93 per hen housed to $5.37 per hen housed. The differences among respondents reflected length of the laying cycle, strain selected and management. Lower returns were associated with shorter flock aged at either depletion or onset of molt, and the higher contribution margins were associated with an extended first cycle, usually with flock depletion at approximately 80 weeks of age. The correlation factor between contribution margin and age was 0.43.
Each week of extending the first cycle from 50-90 weeks of age added 5.6 cents to the 52-week contribution margin.

USDA releases 2009 Prospective Crop Plantings report

U.S. producers intend to plant less in 2009 than in 2008, says University of Illinois Extension Economist Darrel Good and according to the U.S. Department of Agriculture (USDA) Prospective Plantings report.
Planting intentions for all crops included in the survey are 7.8 million acres less than acreage seeded to those crops in 2008. Including acreage of hay intended for harvest, the decline is about 7.6 million.

Declines total as follows:
*4.5 million for wheat
*1.3 million for sorghum
*1 million for corn
*658,000 for cotton
*446,000 for sunflowers
*410,000 for peanuts
*154,000 for canola

For wheat, 75% of the acreage reduction is for winter wheat, even though winter wheat seedings are 791,000 acres larger than reported in January. Intended acreage of soybeans included in the report is 306,000 more than planted in 2008. Intended acreage of all oilseed crops is 672,500 less and acreage of feed grains (corn, sorghum, barley, and oats) is 2.4 million less than planted in 2008.
The complete USDA report can be accessed here.

Sanderson reports first-quarter loss of $6.7 million

Sanderson Farms Inc. reported a net loss of $6.7 million, or $0.33 per share, for the first quarter of fiscal 2009 compared with net income of $6.2 million, or $0.30 per share, for the first quarter of fiscal 2008. Net sales were $388.9 million compared with $362.6 million for the same period a year ago.
The first-quarter results reflect prevailing economic conditions and reduced consumer demand for protein consumed away from home, according to Joe F. Sanderson, Jr., chairman and chief executive officer. "Demand for chicken products held steady in the retail grocery market, but the slowdown in restaurant traffic continues to adversely affect sales to our foodservice customers,” Sanderson said. “While market prices improved during the quarter compared to where the markets stood at the end of fiscal 2008, it was not enough to offset our costs. Grain prices for the quarter were actually down sequentially compared to our fourth quarter of fiscal 2008, but were still higher than last year's first quarter."
The company said chicken prices were mixed during the first quarter citing boneless breastmeat prices down 9% and jumbo wing prices up 6.5%.
"We do not expect demand to improve until the economy gains some traction and consumers resume spending and dining out again," Sanderson said. "We will continue to manage our operations as efficiently as possible through this cycle and we do not plan to return to full production until we see an improvement in market conditions. However, we do expect that our feed costs will be lower this year as grain prices are also being affected by the economy and reduced demand.
"We continue to believe market forces will balance supply and demand for our industry over the long-term. Until consumer demand returns, any market price improvement will have to come from supply side reductions," said Sanderson.