May 12, 2020

Feed Cost Indices for Laying Hens

by: Michael Langemeier

This article discusses recent trends in feed costs for laying hens.  A ration consisting of corn, soybean meal, dry distillers’ grain, soybean oil, and supplements was used to create the feed cost indices.  Corn prices represent averages for Indiana as reported by USDA-NASS.  Soybean meal and distillers’ grain prices were obtained from Feed Outlook, published monthly by USDA-ERS.  Information from Agricultural Prices, a monthly USDA-NASS publication, was used to compute soybean oil and supplement prices.  Future prices for corn and soybean meal in mid-May were used to project feed indices through 2020.

Figures 1 and 2 report monthly corn and soybean meal prices from January 2000 to March 2020.  A distinction is made for prices before and after 2007.  The period starting in 2007 is often thought to be a new price regime.  Corn price averaged $2.18 per bushel from 2000 to 2006, and $4.52 per bushel from 2007 to the current month.  Soybean meal price averaged $187 per ton from 2000 to 2006, and $351 per ton from 2007 to the current month.  Corn and soybean meal prices are expected to remain well below the average prices since 2007 for the rest of this year.

Figure 1. Monthly Indiana Corn Prices, 2000 to 2020

Figure 1. Monthly Indiana Corn Prices, 2000 to 2020

Figure 2. Monthly Central Illinois SBM Prices, 2000 to 2020

Figure 2. Monthly Central Illinois SBM Prices, 2000 to 2020

Figure 3 presents monthly feed cost indices for laying hens from January 2000 to April 2020.  The latest full year of indices, 2019, has an index of 100 so all indices outside of this year are expressed in relative terms.  As with corn and soybean meal prices, a distinction is made for feed cost indices before and after 2007.  The average index from 2000 to 2006 was approximately 57 while the average index since the beginning of 2007 was approximately 109.  The projected indexes for May and June are 93 and 85, respectively.  The indexes for the last 6 months of this year are expected to range from 84 to 86.

Figure 3. Monthly Laying Hen Feed Cost Indices, 2000 to 2020

Figure 3. Monthly Laying Hen Feed Cost Indices, 2000 to 2020

Annual feed cost indices for laying hens are presented in figure 4.  The projections for 2020 (red bar) used corn and soybean meal futures prices in mid-May.  The projected feed cost index for 2020 is 91.  This suggests that feed costs for 2020 are expected to be 9 percent lower than feed costs in 2019.  Of course, there is a lot of uncertainty regarding feed prices for the second half of this year.

Figure 4. Annual Laying Hen Feed Cost Indices, 2000 to 2020

Figure 4. Annual Laying Hen Feed Cost Indices, 2000 to 2020

This article discussed recent trends in feed costs for laying hens.  Current projections suggest that feed costs for 2020 will be 9 percent below levels for 2019.  Feed costs in the second half of this year are expected to be approximately 15 percent below those experienced in 2019.  Information related to feed costs for other livestock species can be found on the web site for the Center for Commercial Agriculture.

TAGS:

TEAM LINKS:

RELATED RESOURCES

Ag Outlook Webinar

June 12, 2020

Recorded June 12, 2020 | Purdue agricultural economists Michael Langemeier and James Mintert provide an updated ag outlook, which includes information from USDA’s June WASDE report along with updated profitability estimates for corn and soybeans. The webinar also addressed questions regarding eligibility for and assistance provided by USDA’s CFAP program.

READ MORE

Coronavirus Food Assistance Program Application Details

May 27, 2020

USDA’s Farm Service Agency is accepting applications for the Coronavirus Food Assistance Program (CFAP) from producers who have suffered losses. Indiana FSA Director Steve Brown and staff join Jim Mintert for a discussion on eligibility requirements, payment rates and application details of the 2020 CFAP program.

READ MORE

Contingency Planning with Cash Flow Shortages

May 15, 2020

As cash flows from the farm operation become tighter due to COVID-19 and weaker commodity prices, it is necessary to…

READ MORE

UPCOMING EVENTS

Ag Outlook Webinar

July 13, 2020 at 12:30 p.m. EDT | Join us online, it’s free! Purdue agricultural economists Michael Langemeier and James Mintert will provide an updated ag outlook.

Read More

Coronavirus Food Assistance Program Application Details

May 27, 2020

USDA’s Farm Service Agency is accepting applications for the Coronavirus Food Assistance Program (CFAP) from producers who have suffered losses. Indiana FSA Director Steve Brown and staff join Jim Mintert for a discussion on eligibility requirements, payment rates and application details of the 2020 CFAP program.

READ MORE

2019-08 PAER: 2019 Farmland & Cash Rent Issue

August 5, 2019

News reports about the farmland market during the first half of the year called attention to the ability of top quality farmland to retain its value, while lower quality land seemed to be weakening But across all farmland qualities the limited supply of farmland for sale was pointed to as the primary reason for relative stability in farmland values. What is the situation and outlook in Indiana now?

READ MORE

2019 Indiana Farm Custom Rates

June 8, 2019

The rates reported in this publication were compiled from questionnaires received from farmers, farm owners, farm custom operators, and professional farm managers in Indiana.

READ MORE

Delivered right to your inbox

Don't miss our farm management program and resource updates! Receive our Commercial AGNews monthly newsletter - view the latest email here.