How to price wet feeds

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It’s important to know the dry matter concentration when buying or selling feeds. Bill Weiss, professor and extension dairy specialist at The Ohio State University, provides these steps to help you price wet feeds:

1. As buyer and seller, agree on a price on a 100 percent dry matter basis. This can be done using a feed-pricing program. (The software program SESAME™, developed at The Ohio State University, is one example.) Or, you can use market prices of similar dry feeds to price wet feeds. So, for example, if you want to buy wet distillers grains, you could use dried distillers grains prices. Or, if you are buying haycrop silage or balage, you could use hay prices. Just make sure that the nutrient composition is similar.

2. Next, convert market price of similar feeds to 100 percent dry matter basis. When using a dry concentrate, the dry matter price is equal to the as-fed price divided by 0.90 (see example below). When using hay, the dry matter price is equal to the as-fed price divided by 0.85.

3. Obtain an accurate value by doing a dry matter analysis of the feed of interest.

4. Then, to convert the dry matter price to an as-fed price for the feed of interest, follow this equation: dry matter price × (dry matter ÷ 100) = as-fed price.

 

Here is an example:

Dried distillers grains sell for $240 per ton and wet distillers is 27 percent dry matter.

$240 ÷ 0.9 = $267 per ton of dry matter.

The comparative price of wet distillers is: $267 x 0.27

(i.e., 27% dry matter ÷ 100) = $72 per ton of as-fed wet distillers grains.



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