Feed Prices

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                                                                             PHOTOGRAPH | MARK LLEWELLYN

Feed Prices
  Global issues fueling feed price increases          307 million metric tons (MMT). In 2008,

  I  f you’ve paid careful attention to your re-      nearly one-third of the harvest, about 105
     ceipts from the feed store, you certainly        MMT, is expected to be used for the produc-
  have noticed that the price of horse feed has       tion of ethanol. This has increased dramati-
  crept up to unheard-of levels. And while it         cally since 2000, when only about 15 MMT
  might be tempting to assign blame to your           were tagged for ethanol production.
  local feed manufacturer, larger forces are at       Because of the demand for ethanol, corn
  work. There are five key factors that account        prices have risen significantly. Farmers have
  for skyrocketing grain prices: biofuel produc-      chosen to cultivate corn instead of other
  tion, extreme weather patterns across the           crops because corn has become more profit-
  globe, high oil prices, currency fluctuations,       able. Overproduction of corn, however, has
  and a surge in global food demand.                  diminished the acreage available for other
  Biofuel production. Ethanol is the most             crops, causing them to become scarcer and
  popular renewable biofuel today. Used as an         thus more costly to feed manufacturers.
  alternative automotive fuel, ethanol is made in     Some agricultural economists believe the
  a multistep process. First, the starch portion of   ethanol boom is slowing down. With corn
  the corn kernel is converted to sugar. The sugar    prices soaring, ethanol producers are faced
  is then subjected to fermentation, and finally       with higher input costs and are therefore not
  the mix is distilled to yield ethanol.              realizing the profits they once did.
  The United States grows approximately one-          Extreme weather patterns. Despite the ad-
  half of the world’s corn, equivalent to about       vances made in cultivating crops over the last
  EQUINEWS | SUMMER         3

As grain prices increase, horse
owners should maximize their use
of forages such as pasture.

several decades, little can be achieved with-     Canadian dollar have increased steadily in
out the cooperation of the weather. A series of   recent years.
unfortunate weather occurrences has been a
                                                  Some economists postulate that about
factor in rising feed costs.
                                                  one-third of the recent rise in corn price is a
For instance, drought-stricken Australia ex-      reflection of the weak United States dollar.
ported considerably less wheat in 2007 than
                                                  Surge in global food demand. Billions of
in previous years, down more than 20%. As
                                                  people are buying more food than ever before,
one of the world’s biggest wheat produc-
                                                  especially in flourishing China and India. Peo-
ers, such a shortfall affects the entire global
                                                  ple in these countries have the wherewithal
outlook. Southern Africa has been affected by
                                                  to purchase food rather than growing their
a prolonged drought as well. Recent flooding
                                                  own. Increasing meat consumption in these
in China has destroyed 5.5 million hectares of
                                                  countries, for example, has helped boost the
wheat and rapeseed.
                                                  demand for grain. In China, beef consump-
In addition to this, an abnormally dry grow-      tion has increased by 26% since 2000, and
ing season across northern Europe threatens       pork, which was already a popular food item,
grain yields. Smaller crops have been reported    rose by 19%. In India, chicken consumption
in Canada and the United States as well.          has almost doubled in eight years. More grain
                                                  is necessary to feed animals intended for
High oil prices. The recent spike in oil prices
                                                  human consumption.
has a direct effect on rising feed costs. Fore-
most, oil prices impact the cost of planting,     Other countries are also prospering. Since
cultivating, and harvesting crops. In addition,   2002, the combined gross domestic prod-
oil prices also affect freight costs as grains     uct of the 24 largest emerging markets has
are shipped from place to place, sometimes        doubled, and per capita income has risen
overseas. And finally, high oil prices drive up    nearly 14% a year.
feed manufacturing costs.
                                                  Economists theorize that increased grain prices
Currency fluctuations. Most internation-           can be attributed equally among three factors:
ally exchanged grains are traded in dollars.
In recent years, the value of the U.S. dollar     (1) biofuel, weather incidents, and oil prices;
has plummeted. This is completely inverse to
what is happening in other parts of the world.    (2) currency fluctuations; and
The values of other currencies such as the
Euro, British pound, Australian dollar, and       (3) wealth in emerging markets.
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Horse owners should accept the inevitable              with an equine nutritionist to ensure that you
increases that have occurred recently in feed          are using an appropriate forage for the horses
prices. Some of the factors that caused the            you are feeding. Likewise, contact an agrono-
recent upsurge might not be so detrimental             mist or a pasture specialist to be sure you are
in the future (weather may be conducive for            getting the most out of your grazing acreage.
high yields, for example), and consumers may
                                                       • Be suspicious of feed manufacturers that
realize a slight relaxation in prices.
                                                       have not raised their prices. Historically,
By taking a few minutes to closely examine             when one feed ingredient became too pricey
your management schemes, you might be                  to include in horse feeds, an alternate was
able to find ways to cut costs. Here are a few          available. Not so today. The price of all feed
examples.                                              ingredients has increased. Corn, wheat, oats,
                                                       and soybean prices have reached all-time
• Take a critical look at body condition.
                                                       highs. Add in the increased costs of other in-
Certainly, some owners like to see their
                                                       gredients such as vitamins and minerals, and
horses fleshier than need be. Optimal body
                                                       feed prices are bound to rise. To maintain the
condition occurs when the ribs cannot be
                                                       quality of feed, manufacturers must ask con-
seen but can be felt on gentle palpation. Over-
                                                       sumers to help shoulder the financial burden.
weight horses are often a strain on the horse
                                                       If a feed manufacturer does not increase pric-
owner’s budget because they consume too
                                                       es, there is a possibility that premium-quality
much concentrate. Horses that maintain their
                                                       grains are being replaced by inexpensive ones,
weight on forage-only diets do not usually
                                                       which invariably lowers the nutritional con-
require any concentrate. A well-formulated
                                                       tent of the feed.
balancer pellet will ensure that vitamin and
mineral needs are being met.                           • Buy high-quality horse feed. Certain
                                                       horses require fortified concentrates to grow
• Maximize forage use. Horses have evolved
                                                       and work because they cannot consume
on diets composed entirely of forage. There-
                                                       sufficient calories through forages to grow to
fore, forage should be the primary compo-
                                                       their genetic potential or to maintain opti-
nent of a horse’s diet. While all forage offered
                                                       mal body condition. When concentrates are
to horses should be free of dust, mold, weeds
                                                       necessary, be sure you are feeding high-qual-
and foreign debris, the quality of the forage
                                                       ity, fully fortified feeds. Low-end brands
can vary depending on the type of horses be-
                                                       often do not contain sufficient fortification
ing fed. Weanlings and yearlings, for instance,
                                                       to adequately support growth or exercise.
will likely fare better on an alfalfa mix as it con-
                                                       Though the price may be slightly higher at
tains more energy and nutrients for growth,
                                                       the counter, there is no comparison as to
but the same hay might be completely inap-
                                                       nutritional value.
propriate for a group of idle geldings. Work

EQUINEWS | SUMMER           5

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