Biofuel co-products as livestock feed - Opportunities and challenges

476Biofuel co-products as livestock feed – Opportunities and challengesTABLE 7Estimate of the available market for DDGS in Western CanadaProvincePotential DDGSdemandDemand as % of totalpotential market demandDomestic DDGSproductionSupply Surplus or(Deficit)Potential availablemarket (%)Manitoba 435 000 31 104 000 (331 000) +76Saskatchewan 299 000 21 272 000 (27 000) +9Alberta 517 000 37 40 000 (477 000) +92British Columbia 136 000 10 0 (136 000) +100Total 1 360 000 100 416 000 (971 000) 69Notes: Potential available market indicates proportion of market potentially available to imported DDGS.TABLE 8Annual maize DDGS imports from the United States (2000–2009)Province Average annual value ShareManitoba $CAN 8 382 909 29%Saskatchewan $CAN 1 365 665 5%Alberta $CAN 17 411 275 60%British Columbia $CAN 2 015 858 7%Western Canada $CAN 29 175 706 100%Source: Industry Canada, 2011.the main market for imports of United States maize-basedDDGS, followed by Manitoba. The large beef cattle herd insouthern Alberta accounts for this high demand. Importsfor Saskatchewan and British Columbia are less than10 percent of total potential demand.Substitute feed ingredient priceFeed rations are calculated using the least-cost scenariofor all feed ingredients. The work of Walter et al. (2010)indicates how beef cattle would perform on maize-basedDDGS. Robinson (2011) used the animal performance dataobtained by Walter and co-workers to identify the priceof maize-based DDGS at which feedlot operators wouldbenefit from using the maize-based DDGS. Robinsonobtained prices for barley and maize for a 16-month period(Figure 4). Based on common feedlot operational costs andthe work of Walter et al. (2010), Robinson calculated thebreak-even point for the 16-month period (Figure 5).Given the feed-to-gain ratio determined by Walter etal. (2010) and common feedlot operational costs, feedlotoperators would obtain a $CAN 1/head advantage or betterif the ratio of the cost of maize-based DDGS was lessthan 125 percent of that of barley. Walter et al. (2010)also determined that, on average, animals on maize DDGSwere in the feedlot three days fewer than control animals.Figure 8 includes the cost savings to the feedlot operatorwhen average daily gain, as well as feed-to-gain ratio formaize DDGS inclusion at 20 percent of the ration, is calculated.A key factor that affects the demand and usage of afeed ingredient is the price of substitute feeds. Livestockproducers usually substitute among feed ingredients inorder to take advantage of price variations. A major con-FIGURE 4Barley and maize DDGS prices, Lethbridge basis ($CAN)300250200150100500Jan-10Feb-10Mar-10Apr-10May-10Jun-10Jul-10Aug-10Sep-10Oct-10Nov-10Dec-10Jan-11Feb-11Mar-11Apr-11May-11Barley($CAN/tonne)Maize DDGS($CAN/tonne)Maize DDGSpercent of barley