Income Over Feed Cost vs Cost per Gain: Choosing a Swine Diet

Feed cost per gain measures the feed expense required to produce a unit of liveweight gain. Income over feed cost, or IOFC, subtracts feed expense from the value of output over a defined period. They answer related but different questions, so the preferred diet can depend on the business objective and the comparison boundary.

For swine, begin by stating whether you are comparing the same number of days, the same starting and ending weights, or a complete production cycle. Without that boundary, a precise-looking margin can be misleading.

Write the equations and units

• Daily feed cost = feed intake, kg/day × feed price, $/kg.
• Feed cost per kg gain = daily feed cost ÷ daily gain, kg/day.
• Equivalent expression: feed cost per gain = FCR × feed price.
• Illustrative daily gain-value margin = daily gain × value per kg liveweight gain − daily feed cost.

The last equation is a simplified incremental IOFC calculation. It is not a full pig budget or recognized daily cash revenue. A complete budget may use pig purchase cost, sale weight and pricing grids, mortality, inventory valuation, and other costs.

Penn State’s IOFC explanation, written for dairy, provides the general gross-margin distinction: money remaining after feed still needs to cover other expenses. The swine examples here are original arithmetic scenarios, not a transfer of dairy production assumptions.

Work through two hypothetical diets

Assume a constant value of $1.80 per kg of liveweight gain and the following performance inputs. These values are illustrative assumptions, not experimental results or predictions from a formulation.

Measure	Diet A	Diet B
Feed price, $/kg	0.30	0.32
Feed intake, kg/day	2.50	2.40
Daily gain, kg/day	0.90	1.00
Daily feed cost	$0.750	$0.768
FCR, feed/gain	2.778	2.400
Feed cost/kg gain	$0.833	$0.768
Daily gain-value margin	$0.870	$1.032

B costs more per tonne and slightly more per day, yet costs less per kg gain under these assumptions. Its daily gain-value margin is also greater. The result follows from the assumed performance; changing the growth response can change the conclusion.

Use the same endpoint when comparing feed cost

For 60 kg of gain at constant performance, A requires about 66.67 days and 166.67 kg feed, costing $50. B requires 60 days and 144 kg feed, costing $46.08. B saves $3.92 in feed and reaches the common endpoint about 6.67 days sooner.

By contrast, over a fixed 60-day period A produces 54 kg gain and B produces 60 kg. The simplified gain-value margins are $52.20 and $61.92 respectively, a $9.72 difference. These are different comparisons. Do not describe the $9.72 fixed-time difference as feed savings for the same finished weight.

The calculations assume constant intake and gain, identical health and mortality, and linear value of gain. Real growth phases, carcass outcomes, and sale schedules may violate those assumptions.

Calculate the performance needed to break even

At B’s daily feed cost of $0.768, it needs daily gain above 0.768/0.833333 = 0.9216 kg to beat A’s feed cost per kg gain. To beat A’s daily gain-value margin at $1.80/kg, it needs gain above (0.870 + 0.768)/1.80 = 0.91 kg/day.

The thresholds differ because one objective is cost per unit of output and the other is margin per day. Recalculate both when feed prices or animal values change. This is a more informative discussion than asking whether an ingredient is simply “too expensive.”

Keep costs outside the equation visible

Labor, facilities, financing, health, mortality, transport, processing, and other costs can alter the business decision. Faster gain may have value when it changes facility occupancy, but that value depends on how the production system actually uses the time.

Likewise, a liveweight price does not reproduce a carcass pricing grid. Compare the output you are actually paid for. Define whether feed prices include freight and manufacturing, and avoid including a cost in both the feed price and another budget line.

Compare scenarios without pretending they are measurements

Separate three categories: measured farm performance, model-predicted performance, and manually entered assumptions. Record the source, applicable population, date, and uncertainty for each. Run a conservative growth response alongside the central case.

Check that diets remain nutritionally appropriate when optimizing an economic objective. A mathematical margin gain from removing a necessary nutrient constraint is not a useful commercial result. Review energy-system consistency and FCR measurement before trusting the comparison.

What DietForge currently supports

DietForge supports formulation across its available species. Its built-in growth, cost-per-gain, and income-over-feed-cost models currently cover swine only. Economics models for other livestock species are planned. Pro users can compare swine scenarios, but the model inputs and assumptions still require review.

Key takeaways

• Cost per gain and IOFC answer different economic questions.
• Compare the same time period or weight endpoint, and label which one.
• IOFC is not net profit.
• Use break-even performance and sensitivity analysis to expose assumptions.

Frequently asked questions

Is the lowest-cost diet per tonne always best?

No. Intake, growth, feed conversion, output value, and other costs can reverse the ranking.

Can I use predicted growth as guaranteed revenue?

No. Treat it as a scenario estimate and review its applicability against measured farm performance.

Which objective should I select?

Choose the measure that matches the decision: feed cost per gain for feed efficiency in dollars, or a clearly defined margin objective for output value after feed. A complete business decision may require a full budget.

Explore DietForge Pro to evaluate swine formulation economics alongside your ingredient and nutrient constraints.