I recently spoke with one of our customers, and the topic of shipping costs came up. He relayed to me some information on this expense, and I was able to calculate how much this has increased over time.
It’s perhaps no surprise to anyone, but it costs more and more to ship the same quantity of feed ingredients and complete feed – over 2X increase in the past 33 years (with the particular mode of transportation we were discussing, and in his area). Of course, several factors play into this increase, including rising fuel costs, but also difficulty obtaining other modes of hauling, such as rail (see here and here).
When you fill up the truck or rail car with a feed ingredient, it’s important to consider how much available nutrition you are paying to ship. The digestible or available nutrients are those that can support and enhance animal performance (weight gain, milk production, egg production, and so on; see here and here and here), and the levels of these important factors are affected by the quality of the starting materials, the processing conditions, adequacy of storage, and other factors. In short, the available nutrients in a particular feed ingredient will indicate how much animal performance can be supported, and thus, how each ingredient should be priced in the marketplace.
Consider some common feed ingredients, and the total metabolizable energy and digestible amino acid contents (important to support animal performance) per metric ton (MT):
I used standard table and spec sheet values for nutrients, digestibility and availability (in swine), and bulk density. Extrusion was performed using high-shear dry extruders from Insta-Pro. ExPress® soy meal was created using Insta-Pro extrusion followed by chemical-free, mechanical oil pressing. Solvent-extracted soybean meal is commodity soybean meal produced with heating and hexane extraction for the oil, and DDGS is distillers’ dried grain with solubles, which is a by-product of the corn ethanol industry.
You can see that a load of ExPress® soy meal will provide the most metabolizable energy and digestible amino acids compared with the other ingredients, while DDGS will provide the least.
And, this is becoming more and more important as the costs of shipping continue to increase:
Combining all of the data above, it’s not surprising to see a decline in the amount of available nutrition that is being transported per unit of shipping cost. These differences are due in part to the different processing techniques, and also, how much water each of these ingredients contain. It’s becoming more and more expensive to haul around water. I didn’t include ExPress® soy meal or DDGS in 1980 because they were not available then.
So, in conclusion, what all of this tells us is that the quality of feed ingredients is important because, among other things, shipping costs are increasing. Ingredient producers or brokers can choose to focus on quality, and provide an increasing benefit to their customers.
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Founded in the 1960's, Insta-Pro invented and patented high shear extrusion technologies and systems, bettering lives and businesses around the globe.
Today, Insta-Pro is one of the world’s leading manufacturers of human food and animal feed processing equipment. Insta-Pro products are used to transform raw ingredients into nutritional feed for livestock, pets and fish as well as vegetable oil, flour, cereals and meat extenders for the food processing industry. The Insta-Pro product line of extruders, oil presses, preconditioners and coolers have earned the reputation as the preferred choice of food and feed producers in more than 100 countries across the globe.