Drought repercussions will weigh on livestock sector for months to come

Low protein in soymeal and higher toxin levels in distillers grains add new challenges for pig, poultry and cattle feeders

Reuters / The repercussions of this year’s drought across the U.S. Midwest will likely continue to affect the livestock feeding industry for many months to come.

Drought not only impacted the quantity of crops produced but also quality, leading to abnormally low protein content in soybeans and higher-than-usual toxin levels in corn that stand to disrupt the feed industry’s intake of soymeal, corn and distillers dried grains (DDGS) for the foreseeable future.

Soybean prices have slumped around 15 per cent since their early-September highs on the back of reports of higher-than-anticipated soybean yields that may be two bushels an acre higher than USDA estimates issued in September. That’s good news, but the overall usable content of the beans themselves are noticeably below average in terms of protein (soymeal) levels.

Agronomists attached to Iowa State University, one of the top agriculture programs in the country, have projected soybean protein levels at around 33 to 34 per cent of total soybean weight this year, versus around 35 to 36 per cent on average. Soybean oil content is averaging higher-than-normal levels, at around 19.5 to 20 per cent of weight versus 18.5 per cent normally.

These deviations in protein and oil content may not appear to be all that drastic at first glance, but stand to have a potentially pronounced impact on the overall amount of soymeal availability over the coming months once the soybeans themselves are processed into meal and oil.

The latest report from the National Oilseed Processors Association reveals that the average soymeal yield in September was at its lowest level in close to two years.

For hog and poultry producers, this lower overall protein content — aligned with historically tight soybean stocks — is cause for concern, and could force feed purchasers to tweak feeding rations in the months ahead in order to offset any tightness in soymeal supplies.

Corn protein higher

Thankfully for distressed livestock feeders, the shortfall in soy protein levels can potentially be offset by the higher-than-normal protein levels being found in this year’s corn crop, once again brought about by physiological changes that the crop underwent during the weeks of drought seen this summer.

Iowa state agronomists estimate that average corn protein levels this year are up at around 8.2 to 8.3 per cent (of total kernel weight at the standard 15 per cent moisture content) versus around 7.5 per cent normally. However, that doesn’t begin to offset high corn prices, and that’s why distillers grains have become increasingly popular. But once again the drought conditions of this past summer threaten to disrupt the supply and makeup of this feed over the coming months.

The main problem for DDGS users stems from the widespread outbreak of aflatoxin seen in corn this summer. The fungus can be harmful to animals if ingested in large amounts, and according to agronomists can actually be concentrated threefold in DDGS during the ethanol production process.

Overall, the impact of the drought of 2012 is likely to be felt across the entire feeding industry over the coming months and will require flexibility in terms of feed purchases at the manager level and ration tolerance at the animal level throughout 2013. For those enterprises not accustomed to tweaking feed purchases and diets, this could potentially prove to be a challenging and costly period. But for those operations who adapt well to evolving cost and protein levels, the unfolding changes to the protein landscape could well prove to be beneficial rather than a challenge.

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