The benchmark prices are generated from a standardized least cost feed formulation for swine that is typical of what is currently used in Western Canada by the major hog producers. The benchmark price represents the price at which peas start to become an economically feasible feed ingredient for hog producers to include in their diets.
Tradable prices of the major feed ingredients are collected from Central Alberta, Central Saskatchewan and Southern Manitoba. These prices are then entered into the benchmark least cost feed formulation. A feeding value is then derived for feed peas based on their nutritional characteristics and the prices of the other competing feed ingredients. For those familiar with least cost feed formulations, the feed pea benchmark price is simply the "shadow price" or "dual value" of peas, which is the price at which they would enter the swine ration.
The least cost feed formulation used to calculate the benchmark prices was developed in consultation with the Prairie Swine Center and the Feed Pea Network. The benchmark feed formulation will be reviewed on an annual basis by the Feed Pea Network to ensure that it is appropriate and representative of the current feed formulation methodologies. The feed ingredients included in the formulation are feed barley, feed wheat, corn, canola meal, soybean meal, canola oil, synthetic lysine, synthetic methionine, synthetic threonine, mono-dicalcium phosphate, limestone, salt, vitamins and minerals.
An important characteristic of the above methodology is that it provides a consistent benchmark value, using the same methodology each week to collect the prices of competing feed ingredients and to calculate the benchmark prices. While you may not always agree with the prices being used for the competing feed ingredients, they are collected in an unbiased fashion using the same methodology each week. Therefore, the week to week change in the feed pea benchmark prices should track price changes in the major feed ingredients, even if the absolute prices levels are somewhat different in your region.