The cost of horse feed, as with all commercial goods, has increased lately. There is no single cause of increased prices, but rather several different areas impacting feed production that have contributed to the increased prices.
What Goes into the Cost of a Bag of Horse Feed?
Broadly, the cost of a bag of horse feed comes from four main categories:
- Raw ingredients
- Manufacturing the feed
- Product packaging
- Transporting the feed
Raw ingredients are simply the components used to create horse feed. The ingredient list on the tag will show you all the raw ingredients in a feed; these include large inclusion ingredients, like beet pulp or soyhulls, down to micro ingredients, such as vitamins and minerals.
The price of raw ingredients is impacted by many variables, from local growing conditions and harvest yields to global demand. The demand for some ingredients may be driven by the cost and availability of other ingredients due to demand and usage in the diets of other livestock species. For example, if the price of corn rises to a certain level, swine (pig) nutritionists may change their formulations to include more wheat middlings. Wheat middlings are a common ingredient in pelleted horse feeds. The increased demand for wheat middlings for pig diets then increases the cost of wheat middlings and, therefore, the cost of horse feeds containing this ingredient.
Seasonal impacts on ingredient prices are also common. Beet pulp harvest occurs in the fall, and often beet pulp shred and beet pulp pellet supplies run short towards the end of summer and early fall, driving up prices. Once the beet pulp products from the newest crop become available after harvest, prices generally decrease due to the increased supply. Concurrently, wheat middlings prices are, historically, lowest in the summer months and increase during the fall and early winter. However, wheat middlings are a co-product of flour products, and traditional buying patterns of flour and baking products shifted drastically during COVID-19 lockdowns, which has altered these seasonal patterns and made price forecasting less predictable.
The micro ingredient market is global. Several years ago, a fire at a plant in Germany that produced Vitamin A and E resulted in a global shortage of these ingredients, which dramatically increased prices.
These are just a few examples of factors that impact feed ingredient pricing.
At Tribute®, we are committed to fixed formulations to best support your horse’s digestive health, but that does introduce variability into feed prices due to the ever-changing costs of ingredients. A least-cost formulated horse feed would substitute out the higher priced ingredients during price fluctuations to keep costs down, but with this approach, there comes risk to the horse’s health.
The cost to make horse feed includes everything from the equipment that makes the feed, labor costs, and electricity, to power facilities and beyond. One notable point on manufacturing costs is that the more times a feed ingredient is handled in a mill as part of the manufacturing process, the greater the cost of manufacturing is, which reflects on the final price of the feed. A great example of this is comparing textured and pelleted horse feeds. Textured horse feeds will often include a pellet, which holds the protein, vitamins, and minerals. So, first, there is the cost to make the pellet. Textured feeds then go through another “level” of manufacturing, which involves the blending of the other ingredients, such as oats or beet pulp shreds, that make the feed texturized. This occurs in a separate blender, requiring more energy (electricity, time, etc.) to produce this type of feed. A pelleted feed, on the other hand, may contain the same ingredients as the textured feed, but only goes through one manufacturing process: pelleting.
The most obvious component of feed packaging is the actual feed bag; however, packaging costs also include pallets and plastic, or net wrap, used to hold bags on pallets during shipment to their final destination. There is also cost in the tape and string used to sew the bags shut. Unfortunately, COVID-19 supply chain disruptions have impacted the prices on all these inputs.
The cost of transportation impacts both the cost of input materials, like ingredients and packaging, as well as the cost to ship horse feed to dealers and horse owners.
These costs are currently intensified by the high prices of fuel, as well as increased demand for commercial truck transportation during the holiday shopping season.
At Tribute®, we make all our horse feed in a dedicated feed mill in Ohio, free of ionophores, and ship it all over the country. This system offers many advantages in creating a consistent, quality horse feed with high safety standards; however, it does create greater transportation cost in areas that are farther from the mill.