Evaluating the economics of fat use for table egg producers
With the current high cost of fat and corn, the cost of increasing protein is relatively small compared to the cost of increasing energy
The price of fat has increased from less than 10 to over 50 cents per pound. This price increase is causing the use of fat in corn-soy layer diets to be re-evaluated.
For many producers it is a common practice to maintain a minimum 0.5% added fat in all diets after egg size reaches large. The million dollar question is: At what fat price does it become uneconomical to add the fat?
Fat when egg size reaches large
My research indicates that 0.5% fat versus no added fat in a corn-soy diet gives 0.5% more eggs, 0.78% less feed consumption, and a 0.1 g larger egg. The larger egg is not too important because using a minimum of 0.5% fat only enters the game after egg size reaches large.
Assuming the improved rate of lay, reduced feed consumption, increased egg weight, current feed ingredient prices and the April 17, 2011, Urner Barry NE egg prices, it can be calculated that including a minimum of 0.5% fat in a corn-soy diet gives the equivalent of $2.30 per ton in reduced feed cost, $1.75 per ton in improved production and about 60 cents per ton from increased egg weight. That equals $4.65 per ton, which is close to the current cost ($4.34 per ton) of adding 0.5% fat.
With 50 cents per pound fat and current egg and ingredient prices, it is about break even to maintain 0.5% added fat in diets after egg size reaches large. No credit has been given for any benefit of fat on dust, equipment die life, feed palatability or egg size needs, and these should also be considered. Not maintaining the minimum 0.5% fat inclusion at current prices will reduce the feed cost per ton. The benefits of 0.5% added fat are best estimates based on many trials. Since egg and feed prices change, the economics of fat use should be continually evaluated.
Fat in peaking diets
Considering the current high fat price, should fat be used in peaking diets? The use of fat in peaking diets before egg size reaches large is also a common practice. With large spreads between medium and large, optimizing egg weight is so important it typically drives the feeding program, but only as long as returns are greater than the cost.
It takes about 1.1% added fat to increase energy 30 calories in a 20 pound peaking diet for week 36 hens or a 22 pound peaking diet for Bovans white hens. The cost of adding 30 calories with 50 cent per pound fat and current ingredient prices, versus the same diet with no added fat, is $9.48 per ton. The cost will vary depending upon cost and nutrient composition of the corn and soy used. It can be calculated that the value of the improved performance is greater than the cost, with most of the increased returns coming from increased egg weight, which increases the percentage of large eggs and decreases the percentage of medium eggs.
With current fat prices, it can still be economical to use some limited additional fat in peaking diets prior to reaching a 48 pound case weight depending upon price spreads.
However, the decision to use fat in this case is much more complex than simply maintaining a minimum of 0.5% added fat in all diets after egg size reaches large. Because protein is just as important as fat in increasing early egg size, percent dietary protein levels typically increase at the same time dietary energy levels are increased. With the current high cost of fat and corn, the cost of increasing protein is relatively small compared to the cost of increasing energy. Because of this, the question becomes: Should only protein with no added fat or protein with added fat be used to optimize egg weight? With current fat cost and low spreads in egg price, using only protein appears to be more economical. There is some indication the price of corn will continue to increase. If this happens and soybean meal takes any dip, the cost of layer diets containing the lowest protein level could be the same as the cost of the diet containing the highest protein level, and that will be a first for U.S. egg producers.
Since the cost of maintaining a minimum of 0.5% fat (10 pounds per ton) has gone from less than $1 to over $4 per ton, it is clearly time to re-evaluate fat and energy use. At some price, fat will become uneconomical.
However, at the same time, the greater the feed cost, the more important the use of fat becomes. For example, if increasing dietary energy level 60 calories reduces feed intake about 4.6%, then total feed cost can be increased the equivalent of $4.60 per ton for $100 per ton feed and $13.80 per ton for $300 per ton feed without increasing the total cost of feed consumed due to improved feed efficiency. The added value of increased feed efficiency at higher feed costs coupled with the price spread between medium and large eggs helps to keep fat in the diet.
The higher the feed cost, the more important controlling feed intake and feeding correctly are. Least cost formulation formulates a diet with the lowest ingredient cost to achieve specified energy levels. Determining an optimal cost ration requires analysis of the cost and benefits of over or under feeding of protein, energy, or both as feed and egg prices change.
The correct energy level for optimum performance and returns has to be determined by comparing the cost versus benefits, and analysis which takes all of this into consideration is referred to as econometric feeding.