Despite predictions of record-high market hog prices in 2011, swine producers will be challenged once again to achieve profits in their operations because of increasing feed ingredient costs. University of Illinois animal scientists suggest the following five ways producers can reduce costs and increase profits.

Feed costs make up 70% of a producer's cost to produce market hogs. As feed ingredient costs rise, it's become even more critical for producers to take a closer look at non-traditional feed ingredients. There are a number of options available for reducing costs by changing ingredients and formulating new diets.

1. Incorporate DDGS into diets. Although the cost of distillers dried grains with solubles (DDGS) has increased during the past six months, there are still significant savings associated with the use of DDGS in swine diets.

With current prices for corn, soybean meal and DDGS, costs are reduced by $7 to $9 per ton for each 10% of DDGS included in swine diets. In most cases, 30% DDGS can be included in diets fed to all categories of pigs if an average or above average quality of DDGS is used and if diets are properly balanced for all nutrients. If 30% DDGS is included in diets fed to sows, weanling pigs and growing-finishing pigs, total cost savings by using DDGS is approximately $10 per market pig produced.

2. Use small grains when available. If small grains are available, the price of these grains should be followed closely as they may replace all or most of the corn in diets fed to all categories of swine. Wheat has a slightly greater nutritional value in a pig's diet than corn. Wheat can easily replace all the corn in the diets. On a per-bushel basis, a producer can pay between 25 and 50 cents more for wheat than for corn without increasing diet costs.

Barley and sorghum can also replace all or most of the corn in diets for all categories of swine and the nutritional value of each of these grains is close to that of corn. However, because there are fewer pounds per bushel for barley than for corn, the cost of barley, on a per-bushel basis, should be no more than 85% to 90% of the cost of corn.

Oats can replace up to 40% of the corn in diets fed to all categories of swine and if available, can easily be used. However, both the bushel weight and the energy concentration of oats is less than that of corn, so oats should be purchased only if the price is less than 80% of corn (on a per-bushel basis).

3. Take a look at other coproducts. In certain regions, coproducts such as hominy feed, bakery meal or wheat middlings are available to swine producers. Each of these ingredients may be included in diets fed to swine by up to 30%. If they can be purchased at a price that is around 90% of corn or less, they can usually reduce diet costs. Differences exist in the quality of these ingredients, so it is important to work with the suppliers of the ingredients to make sure an acceptable quality is obtained.

4. Use fish meal substitutes. Cost of fish meal has increased dramatically in recent years because of reduced catching and increased demand for fish meal from the feed industry. Among alternatives available are enzyme-treated soybean meal, fermented soybean meal, enzyme-treated pig intestines, poultry byproduct meal, meat and bone meal and blood meal.

"Weanling pigs usually perform well when fed these protein sources instead of fish meal," he said. "Pigs do not have specific requirements for fish meal, so the inclusion of this ingredient should be reduced or avoided."

5. Eliminate inorganic phosphorus. Pigs require dietary phosphorus and because the phosphorus present in corn and soy meal is poorly used by pigs, diets are often fortified with dicalcium phosphate or monocalcium phosphate. But, these phosphate sources have increased in price, causing more producers to use the enzyme phytase in swine diets. By using phytase, a greater proportion of the phosphorus in corn and soy meal can be used and less of the inorganic phosphorus is needed.

The need for inorganic phosphorus is also reduced if diets contain DDGS because DDGS has a relatively high concentration of highly digestible phosphorus. If both phytase and DDGS are used, there's no need to use dicalcium phosphate or monocalcium phosphate in diets fed to weanling pigs after 25 pounds or to growing-finishing pigs. By eliminating the inorganic phosphorus from diets, total costs of the diets will be reduced significantly.

Producers have many options when it comes to diet formulation. In a year when risk management is critical to achieving profit, take a close look at feed ingredients. Reducing feed costs is the quickest way to improve profits.