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Shadow price in least-cost feed formulation
Shadow price is the price needed for an ingredient to be included in a least-cost formulation. In other words, it is the utilization price per unit that an ingredient must be priced below in order to be used in the formulated diet. If the price of an ingredient is above the shadow price it would not cost effective to include in the formula. To calculate a shadow price, most least-cost formulation software will need 1) “room” or “space” in the formulation, 2) at least two different ingredient sources containing at least one nutrient, 3) the cost per unit of each ingredient, and 4) the desired level of the nutrient in the formulation.
How many of you use shadow pricing in you feedstuff purchase decisions or to negotiate ingredient prices with suppliers?
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18 Replies
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<b data-fontsize=”22″ data-lineheight=”26.4px”>Shadow price is important in least-cost feed formulation
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Good Question.
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It is used in cost-benefit accounting to value intangible assets.
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Noted with thanks
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Thanks
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👍
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Well done. 🕊️
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good
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Thanks for sharing with us.
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👍
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✅
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Good
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👍
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Good
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Well appreciated
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