Possibilities for formulating layer diets beyond the traditional least-cost model

Abstract

Feed constitutes >65% of live production costs in poultry production; thus there is vast pressure to formulate ‘least-cost’ diets. The aim of commercial enterprises is usually to maximise profits with the inputs available. In this respect, least-cost feed formulation is limited as it does not account for the relationship between input cost and output value. While it was previously necessary due to the complexity of non-linear models, modern computing has made max-profit feed formulation achievable. Importantly, these models improve flexibility and economic sustainability which is particularly of interest during the recent market volatility. Therefore, this study compared diets formulated in traditional least-cost versus max-profit approaches via practical simulations. The layer hen simulation focuses on dietary methionine (Met) levels as it is an expensive dietary constituent and holds important implications for egg size. The response of intake, egg weight, total egg mass and percentage production of cage layers 52-58 weeks of age to 5 true digestible Met levels (0.13, 0.25, 0.37, 0.48, 0.6%) was sourced from Bregendahl et al. (2008) to model the response of layers over the 6 week period. Diets reported were reconstructed using modern prices (4th quarter 2019, $AUD) sourced from industry. The standard least-cost diet formulated to standard nutrient recommendations consisted of 0.48% Met costing $461.26, resulting in an estimated egg mass of 52 g/bird/day and an egg production of 83%. Therefore, a farm of 20,000 hens from 52-58 weeks of age (42 days) may expect to produce a total of 58,100 dozen eggs (on average 700g egg grade) with a sale price of $2.20/doz. Variable and fixed costs were calculated at $93,575 and revenue (egg sales + spend hens) at $128,220 giving a profit of $34,645 for the 6 week least-cost simulation. Calculations were repeated for all Met levels reported in Bregendahl et al. (2008) and the highest dietary Met level of 0.6% generated the greatest profit of $34,830. However, the maximal profit achievable is defined as the point at which more Met inclusion won’t generate any extra profit, or the point at which marginal costs equal marginal revenue. As the reference data did not cover this range, the response of layers to Met was modelled and the point at which marginal costs equal marginal revenues was estimated at 0.95% dietary Met. Thus, the most economic nutrient level may not correspond with the biological nutrient recommendation, and the greater flexibility and revenue provided by max-profit formulations may aid the poultry industry particularly during challenging economic periods.