01998 Applied Poultly Science, Inc
ECONOMETRIC
FEEDING
AND MANAGEMENT
1. MAXIMIZING PROFITS IN
H'Y-LINEW-36 HENS BY OPTIMIZING
TOTAL SULFUR AMINO ACID INTAKE
AND ENVIRONMENTAL TEMPERATURE'
D. A. ROLAND, SR?, M. M. BRYANT, and J. X. ZHANG
341 Animal Sciences Building, Poulhy Science Depariment,Auburn University, AL 36849-5416
Phone: (334) 844-2605
F a : (334) 844-2416
D. A. ROLAND, JR.
Roland Consulting,Auburn, AL 36830
S. K.RAO
Choctaw Maid F m s , Znc., Carthage, MS 39051
JACK SELF
Cal-MaineFoods, Inc., Jackson, MS 39207
Primary Audience: Nutritionists, Egg Producers, Researchers
I
feed prices. This situation allows requireDESCRIPTION
OF PROBLEM
ments to be fmed or sDecified rl. 21 for a
Nutrient requirements for maximum
performance are not influenced by egg or
1
2
I
L
I
a
particular age of bird a d the nutritiodst to
formulate a series of feeds which, when fed
Alabama Agricultural Experiment Station Journal Series No. 12-975828
To whom correspondence should be addressed
404
properly, allows producers to meet performance goals.
Nutrient requirements for maximum
profits are influenced directly by feed and
egg prices [3,4,5,6,7,8]. However, producers
give little consideration to feed and egg
prices when selecting the best diet. Most have
a fured feeding program. Even when producers attempt to make adjustments, they are
simply guessing because many factors have
to be simultaneously considered to optimize
profits.
To determine maximum profits when
just five variables (feed cost, price of eggs,
price spread between medium and large eggs,
egg weight, and environmental temperature)
and two levels of each variable are manipulated, there will be 32 combinations to calculate. Of course, there are not just two egg
prices or feed costs. There are also other
variables such as energy and protein cost.
Therefore, the possible combinations increase
into the thousands. One can quickly see why
it is so difficult for producers to correctly
manipulate total sulfur amino acid (TSAA)
intake as prices of eggs and feed change.
That is also the reason why all nutrient requirement specifications previously published
in Breeder Management Guides, NRC, or
in any book are fured requirements based on
performance which may or may not give maximum profits.
The purpose of this research is to
demonstrate why there can be no fured nutrient (TSAA) requirements and present data
showing why producers must let egg and feed
prices dictate nutrient levels to maximize profits. The concept involves the manipulation of
hen-house temperature (energy intake) and
TSAA intake as changes occur in feed cost
(energy and protein) and egg price. This
concept, which integrates economics and
environmental control with nutrition and
management programs, becomes possible
by using three well-established nutrition principles [9]. First, egg size (Phase I) is directly
related to protein (TSAA) and energy intake
until the requirement for maximum egg size is
met. Second, buds eat primarily to meet their
energy requirements. Third, energy intake can
be controlled by hen-house temperature.
ECONOMETRIC FEEDING FOR LAYERS
MATERIALS
AND METHODS
Hy-Line W-36 pullets (1600) were divided
into 10 equal treatments and fed one of five
diets at two environmental temperatures for
16 wk (Weeks 21-36, Phase 1). The diets used
(Table 1) were industry diets formulated
based on lysine to allow a TSAA intake of
620 mg/hen/day if hens were fed based on feed
intake. At 21 wk of age hens were fed each of
the five diets containing OH%, 0.76%, 0.72%,
0.69%, and 0.65% TSAA, regardless of feed
intake for the entire experiment. Therefore,
hens consumed a different quantity of TSAA
with each treatment.
The hens were housed in a computerized,
environmentallycontrolled house at two temperatures 15.623.3"C (cool, Av. 20°C) and
21.1-28.9"C (warm, Av. 255°C). Computerlinked sensors monitored the inside temperature and adjusted in-house temperature
accordingly using evaporative cooling, gas
heaters, and body heat. The final photoperiod
provided was 17 hr light and 8 hr dark. There
were eight replications of 20 hens for each
treatment. The hens were housed four per
cage (30.5 x 40.6 cm) in a two-tier cage house.
The performance criteria used were egg
weight, egg production, feed consumption,
and egg specific gravity. All criteria were determined at weekly or bi-weekly intervals for
16 wk. All eggs laid 2 dayslwk were used to
determine egg weight and egg specific gravity.
Egg specific gravity was determined by dipping eggs in graded salt solutions of 0.005 increments. Profits were calculated using the
following equation: P = UBEP-NR-PC-FC,
where P =profits, UBEP = Urner Berry Egg
Price, NR=nest run into package product
delivered (28$/doz), PC = production cost
(18$/doz), and FC = feed cost. The data were
analyzed as a 2 x 5 factorial with temperature
effects, TSAA effects, and TSAA X temperature interactions determined using procedures of SAS [lo].
RESULTS
AND DISCUSSION
The results indicate that TSAA level
(0.81,0.76,0.72,0.69, or 0.65%) had no significant influence on egg production (Table 2).
All birds peaked during Week 4 (24 wk of age)
at 90% and remained 90% until Week 16
(36 wk of age). Environmental temperature
had no influence on egg production. The
Research Report
ROLAND et al.
average egg production for Weeks 21 to 36
for hens housed in the cool and warm environments was identical (83.6%).
Dietary treatments had no influence on
feed consumption (Table 2). However, environmental temperature significantly influenced feed consumption as expected. There
was a 7.1 g average difference in feed consumption per he4day between hens housed
in the warm and cool environments. Toward
the end of 36 wk, hens housed in the cool
environment were eating up to 11.1 g more
feed/hedday than those housed in the warm
environment. Average feed intake was
94.7 ghe4day for hens housed in the cool
environment vs. 87.6 gfhedday for hens
405
housed in the warm environment with a range
from 70 g to 103 glhenlday during the 16-wk
trial. Each decrease of 1°C increased feed
consumption 1.24 glhenlday in the temperature range of this trial.
If feed consumption (feed efficiency) and
egg production were the only factors influencing profits, it is obvious that hens housed in
the warm environment fed the diet containing
0.65% TSAA would be the most profitable.
The reason is that the 0.65% TSAA diet is the
least expensive diet and the birds consumed
7.1 glhedday less feed than the hens in the
cool environment with equal production at
both temperatures. However, feed efficiency
is only one of many factors involved. Another
JAPR
ECONOMETRIC FEEDING FOR LAYERS
406
0.72
91.7
92.9
91.0
89.3
84.8
87.2
101.3
104.3
102.8
103.5
93.7
103.7
94.9
0.69
92.1
92.6
91.4
82.7
83.7
86.8
100.4
101.8
0.65
90.3
89.8
91.0
88.2
83.2
87.7
100.7
104.0
factor that influences profits is egg size (egg
weight).
Egg weight across temperatures was directly and significantlyrelated to TSAA intake
with the effect being apparent from Week 1
(Table 3). The more dense the diet or the more
TSAA consumed, the greater the egg weight.
However, TSAA intake or diet used had a
greater influence on egg weight of hens housed
in the warm environment. There was an average 1.6 g spread in egg weight between buds
fed the 0.81% TSAA diet vs. the 0.65% TSAA
diet and housed in the warm environment.
The effect of TSAA level on egg size of hens
housed in the cool environment was less with
only an average 0.5 g spread between birds fed
the diet containing 0.81% TSAA vs. 0.65%
TSAA.
Environmental temperature also had a
s@cant
influence on egg weight. Average
egg weight from hens housed in the cool envi-
ronment was 1.2 g heavier than that of eggs
from hens housed in the warm environment.
Toward the end of the experiment, the average difference was up to 2.4 g greater for
hens housed in the cool environment. Hens
housed in the cool environment consumed
an average of 17 kcal ME/hen/day more
than those housed in the warm environment.
The increased calories explain much of the
increase in egg weight (cool vs. warm environment).
Egg specific gravity was not influenced
by TSAA level, but was influenced by environmental temperature. Hens housed in
the lower temperature had significantlyhigher
egg specific gravity values. Higher Ca intake
explains the difference.
ECONOMETRIC ANALYSIS
Every producer has different costs; therefore, profits shown may or may not be the
Research Report
ROLAND er al.
407
TABLE 3. Influence of total sulfur amino acids (TSM)and environmental temperature on egg weight and egg
same for all producers. Profits shown simply
demonstrate profits for a particular producer
at a specific time using current egg and feed
prices. However, the differences in profits
from hens fed different diets will be the same
for all producers having the same feed and egg
prices.
Data shown in Table 4 demonstrate how
price spread between medium and large eggs
influences profits. With a 1Wdoz spread,
hens fed the diet containing 0.81% TSAA
(the most expensive diet, supplying 721 mg
TSAA/hen/day) gave maximum profits
(2.7ddoz). Hens fed all other diets made less
profit per dozen. A producer may typically
feed the 0.81% TSAA diet with a warm environment. Therefore, at this egg price, the producer who feeds the diet containing 0.81%
TSAA is feeding the correct feed to maximize
profits. For example, if he had fed the diet
containing 0.69% TSAA, he would have lost
2.7u/doz.
However, with only a 3C/doz spread, profits are not maximized with the diet containing
0.81% TSAA but with the diet containing
0.69% TSAA at 16.7ddoz. Hens fed all other
diets made less than 16.7ddoz. Producers who
use fured requirements do not vary TSAA intake as price spread between medium or large
or as price per kg egg changes. In this case,
with a 3ddoz spread, the producer would still
be feeding the 0.81% TSAA diet (the diet
pre-determined to be his best diet) and losing
0.7u/doz (16.0 vs. 16.7ddoz).
Hen performance (egg size and production) is not influenced by price of eggs or feed.
However, the price of eggs and feed are two
primary factors controlling profits. Therefore,
to optimize profits, different levels of protein
(TSAA) should be fed as price of eggs and
feed changes.
JAPR
ECONOMETRIC FEEDING FOR LAYERS
408
Profit (ddoz)
TSAA (mg/hen/day)
16.0
721
Neither egg price nor feed cost influences
how hens respond to TSAA. Therefore, to
calculate the most profitable diet at any egg
price (regardless of whether eggs are sold by
size or by kg), the point where the cost of
feeding more protein (TSAA) becomes
greater than the increased income resulting
fiom the additionalprotein is determined. For
example (Table 4), when the spread is 153/doz,
increasing feed cost by feeding more TSAA
(0.81 vs. 0.65%) increases egg income by
5.3ddoz (from 33.9 to 3924. Even though
hens fed the diet containing 0.81 vs. 0.65%
TSAA produce the same number of eggs, eggs
from hens fed the diet containing0.81%TSAA
are worth more because they are larger.
However, feed costs are greater when more
protein is fed and, in this case, the increase
in feed cost is 2.13 per dozen (from 16.4 to
18.53). When feed cost (plus all other costs,
which are the same for all diets) are subtracted
from egg income, it can be observed that
profits are maximized at 2.73ldoz with 721 mg
TSAA/hen/day.
When the spread is only 33/doz, the increase in egg income between hens fed the diet
containing 0.81 vs. 0.65% TSAA is only
l.Se/doz (from 51.0 to 52.53). However, the
increase in feed cost is still 2.lqIdoz (from 16.4
to 18.53). Therefore, it is obvious, with a 33
spread, one cannot afford to feed a diet costing
2.le/doz more and get a return of only
1.5eIdoz. In this case, profits are maximized
at 16.73ldoz in hens fed the diet containing
0.69% TSAA with a TSAA intake of
598 mg/hen/day.
16.4
661
16.6
638
16.7
598
16.6
566
Feeding more protein (TSAA) increases
egg size the same amount regardless of the
spread between medium and large or the price
received per kg of egg. However, as price
spread increases, the value of the increase in
egg size becomes greater, which causes the
TSAA requirement for maximum profits to
increase. Therefore, with a 15eIdoz spread,
profits a r e maximized with 721 mg
TSAA/hen/day and with a 33/doz spread
profits a r e maximized with 598 mg
TSAAhedday.
The data in Table 5 demonstrate how
hen-house temperature required for maximum profits is determined by egg price and
spread as well as how it influences the TSAA
requirement for maximum profits. With a
l5~
spread, profits are maximized in a cool
environment at 4.63ldoz with the diet containing 0.72% TSAA vs. only 2.7u/doz in the warm
environment with the diet containing 0.81%
TSAA. With a 153 spread, keeping hens cool
instead of warm and feeding the diet containing 0.72% TSAA instead of 0.81% increased
profits 1.9e/doz. The 1.9eldoz is worth approximately $0.5 milliodmillion henslyr. That is
why almost all new layer houses being built
today in the United States have environmental
control.
The econometric program indicates
which diet and temperature to use for maximum profits at any given egg and feed price.
It does not matter how good a manager a
producer is, if he has fvred diets and temperature, he will sometimes be wrong. With
only two prices and temperatures, four different TSAA requirements exist (Table 5).
Research Report
ROLAND et al.
409
TABLE 5. Influence of environmer tal temperature and price spread between medium and large eggs on profits
(e /doz) and TSAA intake (mghel /day)
3q
I
255OC
I
20.0"c
TsAA(mg/hen/day)
I
765
I
617
*c?/doz spread between medium an 1 large eggs.
INFLUENCE O F INCREASE IN ENERGY
(CORN) PRICE ON NUTRIENT (TSAA)
R E Q U I R E M E N T F O R MAXIMUM
PROFITS
With $%ushe1 corn, it cost $4/ton of feed
to increase nutrient (TSAA) density 0.04 units
(Table 6). With $6/bushel corn, it costs only
$1 for each 0.04 unit increase in TSAA level.
Because of this, the TSAA requirement for
maximum profits is 0.72% with $%ushe1 corn.
With $6/bushel corn, the TSAA requirement is
0.81%. If a producer were feeding the 0.72%
TSAA diet, corn price increased, and no
change in nutrient level from 0.72 to 0.81% was
made, the producer would lose an additional
0.7C/doz (13.0 vs. 13.7ddoz). The nutrient
requirement for maximum profits shifts from
0.72 to 0.81% as corn prices increase because
with high-priced corn, it costs much less to
increase the TSAA level. For %/bushel corn,
it cost only $2 to increase the TSAA level from
0.72 to 0.81% ($199 vs. $201) vs. $8 for
$2/bushel corn ($108 vs. $116). If a producer
did not change his diets as corn cost increased
as in this example, it would be like the producer paying $4/bushel of corn when he could
buy the same corn for $3.75.
INnUENCE OF ENERGY (CORN) AND
PROTEIN (SOYBEAN OIL MEAL) PRICE
AND ENVIRONMENTAL TEMPERATURE ON TSAA REQUIREMENT FOR
MAXIMUM PROFITS
In the previous example, we demonstrated how corn price influences the TSAA
requirement for maximum profits. With this
example, we will demonstrate how corn price,
soybean oil meal (SBOM) price, and environmental temperature influences the TSAA requirement for maximum profits.
With $4/bushel corn and $200/ton
SBOM, the TSAA requirement for maximum
profits at 78°F is 0.81% (Table 7). With
$2/bushel corn and $400/ton SBOM at 78"E
the requirement is 0.72%. If a producer
were feeding the diet containing 0.81%
TSAA with $4/bushel corn and did not change
to 0.72% as corn prices decreased and SBOM
increased, he would lose an additional
1.2~/doz(17.90 vs. 19.lC/doz), approximately
$0.25 million/millionhens&.
Notice also the influence environmental temperature has on profits and TSAA
requirements. With $4/bushel corn and a
temperature of 78°C the TSAA requirement is
0.81%. However, with $2/bushel corn,
$400/ton SBOM, and a temperature a of 68"F,
the TSAA requirement for maximum profits
is 0.65%. If corn price decreased and a producer continued to feed the 0.81% TSAA
(making no change), he would lose 3.2ddoz
(17.4 vs. 20.6C/doz) or approximately
$0.75 million/million hens/yr. That would
be the equivalent to a producer paying
$3.75/bushel of corn when he could buy the
same corn for $3.00/bushel.
The TSAA requirement is different
mainly due to different ingredient prices. For
example, with $4/bushel mrn and $200/ton
SBOM, the 0.81% TSAA diet cost only $8
more than the 0.65% TSAA diet ($150 vs.
$158). However, with $2/bushel corn and
$400/ton SBOM, the 0.81% diet cost $28 more
than the 0.65% TSAA diet ( $ 1 4 2 ~$170).
~ . The
JAPR
ECONOMETRIC FEEDING FOR LAYERS
410
TSAA
CORN PRICE/
BUSHEL*
$2
Profits
FeedCost'
$6
Profit
Feed Cost
0.81%
0.76%
0.72%
0.69%
0.65%
25.4
25.4
25.6
23.9
23.9
116
13.7
201
change in performance (value of product
gained or loss) as dietary nutrient density is
changed is not influenced by feed cost. Therefore, the requirement for maximum profits is
0.81% for the $4/bushel corn and 0.65% for
the $2/bushel corn. This information
demonstrates that there can be no fmedTSAA
requirement for maximum profits as published
in NRC [l] or other tables [2].
In most instances, once a producer optimizes his diets and temperature with average
prices for his particular location (state, country, etc.), he may use the same diet for weeks
or months. The changes in egg and feed prices
have to be fairly wide to cause a shift in diets
and temperature. Therefore, in many cases,
the greatest benefit of having the capability of
altering TSAA intake as feed and egg prices
change is to help the producer confirm that he
is using the diet and temperature required to
optimize profits for average prices under his
conditions. Therefore, it is still important to
continually evaluate and report nutrient re-
112
13.4
200
108
13.0
199
105
11.3
198
102
10.7
197
quirements based on performance criteria
[ll,121.
A producer does not have to have environmental control to use this concept. As can
be seen, a producer needs to know the best
diet to feed regardless of the temperature
used. However, the importance of environmental control for egg producers cannot be
overemphasized. Traditionally, the TSAA requirement for commercial Leghorns has been
determined based on egg production, feed efficiency, and egg mass. Based on performance
criteria, set requirements for TSAA have been
specified that allowed diets to be least cost
formulated and birds fed those diets month
after month at some predetermined ideal temperature with little or no regard for other factors (egg or feed price) that could influence
the bottom line. Hopefully, results of these
studies demonstrate the importance of integrating principles involved in the Econometric
Feeding and Management concept in all
nutrition and management programs.
TABLE 7. Influence of corn and soybean oil meal (SBOM) price and environmental temperature on profits
($/doz eggs)
Research Report
411
ROLAND et al.
CONCLUSIONS
AND APPLICATIONS
1. Producers who understand the Econometric Feeding and Management concept presented
and allow feed and egg prices to dictate nutrient levels fed will have a si&icant economic
advantage over those who do not.
REFERENCES
AND NOTES
1. National Research Council, 1994. Nutrient Reuirements for Poultry. 9th Edition. Natl. Acad. Press,
%ashington, DC.
2. Hy-Line International, 1992.Hy-Line Management
Guide, Hy-Line Intl., West Des Moines, IA.
3. De Grote, G., 1972. A marginal income and cost
analysis of the effect of nutrient density on the
mance of white Leghorn hens in bottom cages. Br.
Sci. 13503-520.
4. Hluwitz, S. and S. Bontslein, 1978.The protein and
amino acid requirements of laying hens. EKperimental
evaluation of models of calculation 11. Value requirements and layer starter diets. Poultry Sci. 57711-718.
5. Morris,T.R, 1983. The interpretation of response
data from animal feedin trials. Pages 13-23 in: Recent
Advances in Animal kutrition. W. Haresign, ed.
Buttelworths, London, England.
6. Cunningham, D.L, 1984. A comparison of controlled feeding programs for maximkin returns of white
Leghorn layers. Poultry Sci. 632352-2387.
7. Fisher, C., 1991. Simulation modelingwith examples
of the models available and their potential. Pages 1-16 in:
Proc. FORTEL Seminal and Workshop, London,
England.
8. Zhang, B. and G.N.Coon,19%. Nutrient modeling
for laying hens. Poultry Sci. 75:416-431.
9. Scott, M.L, M.C. Nesheim, and RJ. Young, 1982.
Nutrition of the Chicken. M.L. Scott and Assoc., Ithaca,
NY.
10. SAS Instilute, 1987. SASISTAT User's Guide.
SAS Institute, Inc., Cary, NC.
11. Calderon, V.M. and LS. Jensen, 1990. The reuirement for sulfur amino acid by laying hens as inuenced by the protein concentration. Poultry Sci.
69934-944.
8
12. Schulle, J.B., J. De Jong, and H . L Bertram, 1994.
Requirement of the laying hen for sulfur amino acids.
Poultry Sci. 73274-280.
ACKNOWLEDGEMENT
This research was supported in rt b a gift from
Degussa Corporation, Kennesaw, Gk?301&-3694.