Implications of Growing Biofuels Demands on Northeast Livestock Feed Costs

Abstract

The relationship between complete-feed prices and commodity feedstock prices are estimated to analyze the effect of higher commodity prices on feed costs, with particular attention towards the price effects and substitutability of corn distillers dried grains with solubles (DDGS). Assuming the historical positive correlation between corn and DDGS prices, each $1/ton increase in the price of corn increases per ton feed costs between$0.45 and $0.67 across livestock sectors. A negative price correlation would offset some of the cost increases, but under most scenarios feed costs are expected to be at or above those experienced in 2007.Agricultural Finance,