A case study on the cost-benefit perspective on the influence of high-protein Distiller's Dried Grains with Solubles (HP-DDGS) pricing and inclusion levels on economic sustainability in pig production

Abstract

Conducting an economic analysis is essential to evaluate the feasibility of including HP-DDGS in feed, aiming to optimize costs and improve economic returns for producers. In this sense, we conducted an economic analysis of high-protein Distiller's Dried Grains with Solubles (HP-DDGS) inclusion in pig diets, aiming to guide pig producers in decision-making for efficient use of production factors and favorable economic outcomes. Performance data were obtained from a nursery-to-finishing experiment with 500 piglets, assigned to one of five HP-DDGS inclusion levels: 0 %, 10 %, 20 %, 30 %, and 40 %. The economic analysis, based on Neoclassical Economic Theory, considered implicit and explicit costs across production settings in two economic distinct scenarios. Additionally, two tools were developed to optimize HP-DDGS inclusion for the best cost-benefit ratio and economic return, focusing on the nutrition cost per kilogram of pig produced. Results indicated that HP-DDGS inclusion in the nursery phase could reduce feed costs and enhance economic returns. Despite being costlier than corn, HP-DDGS offered a better cost-benefit than diets without HP-DDGS. Even when feed costs rose in the scenario where HP-DDGS was pricier than corn and soybean meal, improved feed conversion and higher weights partially offset increased costs, maintaining economic viability. However, in nursery-to-finishing phases, higher HP-DDGS levels led to reduce performance. Under intermediate HP-DDGS pricing, lower production costs compensated for decrease in revenue, resulting in higher profitable. In contrast, high HP-DDGS pricing, coupled with reduced performance, led to economic inefficiency, failing to cover production costs. The challenge of HP-DDGS inclusion is balancing price and levels to minimize costs without affecting performance and revenue. Tools developed showed that when HP-DDGS costs up to 97.02 % of soybean meal and 66.75 % above corn, its inclusion at 40 % allows optimal cost-benefit and maximized returns.