It appears that this summer we are heading towards tight soybean meal supplies, similar to the situation last summer. Every time USDA estimates year end carry-out, the number seems to get lower. Of course this potential tightening of supply is showing up in the market already with an almost $2.50/bu drop in price between current bids and new crop bids. Soybean meal for the summer months is trading at $420-450 per ton while October meal is at $350 per ton.
At the same time, DDGS prices are extremely erratic on a local market basis because of the many rail problems this winter has brought on. There have been reports of local ethanol plants having to slow production due to the inability to receive rail cars in a timely manner for shipment of DDGS and/or ethanol. In the case of DDGS, this has meant some spot prices that can be quite attractive versus expected prices.
While this year looks to be profitable for most, if not all pork producers (unless you experience a dramatic loss of production due to PED virus) there are still quite a few opportunities to further reduce cost of production by managing your diets tighter. Swine nutritionists are working hard to stay ahead of all of the pricing opportunities and concerns that this year is bringing.
Add to this mix the increased availability of crystalline Tryptophan and swine nutritionists suddenly have more options for diet formulation. In the past, quite often the ratio of tryptophan to lysine was the limit in the formulation of many swine diets. The cheapest source of tryptophan was typically soybean meal. This meant that some soybean meal was often added to diets with 20-30% ddgs content in late finishing when all other essential amino acids were adequate or even in excess.
With the prospect of soybean meal being in short supply last summer more than one swine nutritionist was concerned as to how they could meet this requirement. Fortunately enough soybeans showed up at processors that they didn’t have to test the lower limit for the tryptophan:lysine ratio.
Don’t be surprised if this summer your nutritionist formulates some diets that have no soybean meal in them or at least lower levels of soybean meal than you expect, depending on the relationship of soybean meal prices to crystalline amino acid prices. While soybean meal is still an important source of essential amino acids in swine diets, our reliance on it as the major supplier of some of these essentials is declining as the world supply of crystalline amino acids increases.