ISSUE FOCUS 26 FEED & ADDITIVE MAGAZINE April 2025 One of the most pressing challenges facing livestock farmers today is managing one of the biggest on-farm costs, feed. With rising commodity prices that are all but impossible to control, farm managers are encouraged to think differently as to how to manage this input. As farms consolidate into fewer, larger operations, efficiency and performance are becoming the cornerstones of successful farm businesses. BEYOND CONTROL: GLOBAL COMMODITY COSTS Feed represents a significant portion of production costs in livestock farming. In dairying, share of feed costs in total costs can range anywhere between ~30% and ~90%, depending on farm type and location in the world. In beef feedlot production, feed costs account for ~60-70% in Brazil, ~70-80% in US, and ~65-75% in China. Feed cost is driven by both global commodity markets, regional factors such as land availability and energy prices, as well as local market dynamics. In regions of the world where the cost of land, wages, and energy is significantly higher than in others, margins are tighter, and feed efficiency becomes an even more essential focus for farmers who want to stay competitive. For example, in Europe, machinery, equipment, fuel, labor and capital costs are high. In the USA and Latin America, the biggest portion of production costs are on the feed purchased as concentrate feed and forage. This serves as an important reminder to consider local production costs and not just milk or beef price. A key driver of feed costs is the price of core ingredients like corn and soybeans. Corn, a primary source of energy and starch for livestock, is a prime example of a globally traded commodity whose price is largely out of farmers' hands. With global corn production slightly contracting this year, prices are expected to increase. Soybean production is set to increase by about 6% in 2024/5, which may lead to slightly lower prices in the medium term. Production of these key crops is variable annually, influenced by weather, pest pressure and prices. Farmers and feed manufacturers must be prepared for volatility in feed prices and adjust their strategies accordingly. FEED EFFICIENCY: ONLY AS GOOD AS YOUR FARM MANAGER As feed manufacturers and farmers, the reality is that farmers often have no choice but to accept the Think Different: FARM PROFIT IS IN INPUT COST CONTROL NOT PRICE Cosmin Muntean Technical Manager - EMEA, Animal Nutrition & Health dsm-firmenich
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