November 9, 2006

 

US cattle feedlots still rely on corn, distillers grain

 

 

Rising corn costs have not changed feeding patterns by feedlots in the US Plains states, according to livestock managers and extension specialists.

 

Corn and its by-product from ethanol production, distillers grain, is the preferred choice to feed cattle, but due to demand from ethanol production, corn prices have shot higher. Chicago Board of Trade corn prices have gained about 90 cents since Oct 2 and the most-active December contract settled at US$3.57 3/4 a bushel Wednesday (Nov 8).

 

Sorghum is an alternative to corn as its nutritional value is similar to corn. Some feeders use sorghum in their rations all the time, and there is at least one ethanol plant that uses it instead of corn for its starch base. But the vast majority of cattle feedlots still use a corn base, and the prices spread between the two has not diverged enough to make them switch.

 

Currently cash sorghum prices are roughly 97 percent of cash corn. But that's not enough of a savings to cause cattle feeders to deal with sorghum and its performance variations. Most feeders won't consider switching until the difference is 85 percent to 90 percent, said Steve Amosson, Panhandle Area Agricultural Economist for Texas A&M University.

 

The variation in the size of sorghum berries means feedlot feed flaking equipment has to be run slower, which means added work, Amosson said.

 

The flakers also have to get those flakes to a very specific thickness to get the most from the sorghum, feeding specialists said. Differences are so minute and difficult to maintain that many feedlots avoid using sorghum until the price difference with corn is wider.

 

"If you do a real good job of steam flaking it, it's worth about 90 percent of corn," said a Texas feedlot manager.

 

A bigger shift in use from corn to sorghum comes with sorghum about 85 percent of the value of corn, Amosson said.

 

In addition, cattle digestive systems don't handle being changed from corn to sorghum very well, necessitating a gradual shift, if it's going to be done, feeding experts said. Most feedlots will stay with one grain to avoid the problems associated with changing.

 

Many feedlots also lack the ability to feed a combination of grains. This is the case with the Texas manager.

 

So far, rising corn costs have not caused a significant shift in feeding practices, Amosson said. They're just rumbling.