Source:   Rita Jane Gabbett, MEATINGPLACE.COM, 4/26/11

With corn prices exceeding $7 per bushel and projections that by the end of summer U.S. corn stock may be nearly exhausted, some analysts are speculating that poultry, hog and cattle feeders could start switching feed rations to wheat.

Soft red winter wheat futures prices have recently looked attractive against corn as a feed component by mid-summer. However, there is a lot more to the decision to change feeding rations.

So far, big players like Tyson Foods and Sanderson Farms are still on the sidelines, but they are watching prices and continue crunching the numbers.

“We’re not currently using wheat to feed our chickens,” Tyson Foods spokesman Gary Mickelson told Meatingplace. “However, since corn supplies are tight and prices are high, we may add some wheat to our feed rations this summer,” he added.

“We’re just not using (wheat),” Sanderson Farms CFO Mike Cockrell told Meatingplace. “We haven’t used it in a long time. It’s just not pricing into our rations at this point.”

According to livestock analysts Steve Meyer and Len Steiner, who publish the CME Group’s Daily Livestock Report, based on corn at $7.55 per bushel and soybean meal at $342 per ton, soft red winter wheat could be substituted as a feed ingredient up to a price of $8.27 per bushel, which is about where it is priced now. There are about 60 pounds of wheat per bushel, compared to about 56 pounds of corn per bushel.

It’s complicated
Livestock analysts told Meatingplace, however, there is a lot more to consider than price when deciding to switch feed ingredients.
“There are a lot of logistics involved in switching rations,” said Oklahoma State University Extension Livestock Marketing Specialist Derrell Peel, including managing the feed mill, adjusting to different milling and storage requirements, and making the transition slowly enough for the animals.

Peel said it takes two to four weeks to gradually increase the wheat feed component for cattle, “and when you stop, you’ve got to transition them out of it.”

For that reason, Peel notes the feedlots will only make the change if they are confident the discount will be significant enough and the supplies will be great enough to accommodate the transition on each end.

Hogs also will slow their weight gains for a couple of days when feed rations are shifted, but Marcia Shannon, swine nutritionist and associate professor at University of Missouri, said a regional study showed the hogs will make up those weight gains, “so it doesn’t take any more time to get to market.”

She warned, however, that feed grinders must take care not to grind the wheat too fine, or it can cause stomach ulcers in hogs. Shannon said she has already had some inquiries from producers considering switching rations to wheat if the price is right.
With some wheat harvest beginning in late May and corn harvest not starting until September, there could be a lot of wheat and very little corn by mid-summer.

During the summer wheat harvest, wheat supplies are more plentiful and prices are typically more competitive with corn,” noted Mickelson. “We will also examine the use of some other crops as alternatives.

Meat quality
The analysts said there is really no discernable difference in meat or poultry color, quality or taste when fed wheat instead of corn. Even though wheat contains more protein but less starch than corn, they said fat content also remains pretty stable.
As for other feed substitutions, only barley – and only by the most discerning palates – can sometimes be detected.

“You can finish on wheat, corn, barley or sorghum and for 99.9 percent of the market there will be no implications whatsoever on the meat side,” said Peel.

The implication on the price side, however, could be a tempering of corn price rises if enough producers feed wheat to take some of the pressure off dwindling corn stocks this summer.

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