Download A Note on Feed Conversion - BC Chicken Marketing Board

Appendix 10
A Note on Feed Conversion
The purpose of this note is to provide background on the issue of broiler feed conversion in BC, the
Prairies and Ontario. In particular this note will assess whether there are merits in ascribing regional
differences and regional influences to the broiler feed conversion.
Broiler feed conversion is impacted by a wide variety of influences including particularly feed and chick
quality, target weight, as well as a number of environmental and poultry husbandry factors. For
example higher quality feeds lead to more efficient conversions than lower quality. Higher quality
would be associated with superior energy and nutritional values as well as with reduced toxins or
contaminants compared to lower quality. In any case, regardless of higher quality or lower quality, the
best feed is the one that yields the best return. Producers and feed companies do least cost
formulations to determine costs and benefits therein. In Canada, Ontario feed tends to be corn and soy
based while western production, including BC, would have a greater wheat component.
Broiler producers, processors and feed companies focus very close attention to feed conversion and the
factors that influence that driver. The conversion of feed to broiler weight is a critical management
factor for firm and industry profitability.
A critical factor is whether the feed is complete whole feed or on farm formulation. For the purposes of
this discussion the focus is solely on complete feed supplied by feed companies.
With that noted, the only publicly available source of industry conversion is the Chicken Farmers of
Ontario Regulation 402 cost of production (COP) model and parameters as outlined on the MINIMUM
LIVE PRICE page of the CFO website. A key component of the Ontario model is the parameters used for
feed conversion to live weight which is 1.81302 for the 2.15-2.45 kg live bird.
While that CFO parameter is the only publicly available and published conversion figure, the fact is that
feed companies, producers and processors are all well aware of feed conversions for their businesses.
Feed conversions are regularly shared given the serious importance of the factor.
Based on information provided by feed companies, processors and producers, it is clear that the Ontario
conversion is greater than what most producers in BC, the Prairies and Ontario actually experience.
That is, actual conversions in 2015 are going to be more efficient than that indicated by the Ontario COP
formula. For example in Ontario, basic feed programs that are widely available are likely to generate
feed conversions of 1.62-1.67 on mixed sex bird marketed at 2.15 kilograms. More specialized feed
would generate conversions of 1.57-1.62 for the same birds and end weight. Of course lighter birds
would have lower conversions and heavier birds would have higher conversions.
On the prairies, industry experts in both the feed and processing sectors tend to argue that a wheatbased feed might generate greater feed efficiency. Within that context no expert asserts that there is
any intrinsic regional variation in feed conversion efficiency. That is, there is no regional difference
between Ontario, the Prairies and BC with regard to feed conversions.
With that noted however, it is argued that because BC likely has the highest quality feed in the regions
in question. The BC feed is likely to be generally superior regarding the factors noted above for quality.
This may be because the region is feed deficient and must ship so much of its feed into the province.
Given that fact, there is a logistical and efficiency-based rationale for utilizing better quality feeds which
in turn bring about lower feed conversions. This of course again is within the calculated confines of least
cost formulations. BC is the highest cost feed region in question and as such some producers and feed
companies will calculate that higher quality feeds and lower feed conversions may be best for their
operations.
The main point is that the Ontario COP conversion is on the high end of what producers across
the noted regions actually experience. At the same time for the reasons noted above, it can be
used as a benchmark for the regions for comparison of COP feed costs.
Kevin Grier, April 4, 2016