Soybean meal changes price three times in one week. Each time purchasing sends the new price, the formulation team solves the formula again and a new formula goes to production. At the end of the month the production manager complains: the lines keep changing settings, pellet quality swings and the warehouse cannot predict how much of each ingredient will be left. Meanwhile a mill that does not reflect prices for a whole month keeps producing expensive formulas, blind to the market. Both extremes are wrong. Finding the right frequency starts with knowing whether a given price change actually affects the formula.
Not every price change changes the formula
When a least-cost formula is solved, a price range is also calculated for each ingredient in use. While the price stays inside that range, the ingredient's inclusion rate does not change. Only the cost per tonne moves. The distinction matters, because what wears out production is not a change in cost but a change in the structure of the formula.
Take an example, with illustrative numbers. In our broiler grower diet, soybean meal is included at 35.7 percent at 18,000 TRY a tonne, and the upper end of its price range for this formula is about 18,800 TRY. Purchasing reports that soybean meal has risen to 18,500 TRY. Solve again and you get the same inclusion rates. The cost per tonne rises by 0.357 × 500, about 178 TRY, but the formula going to production is the same. The job here is to update the cost records and leave the formula alone.
At 19,500 TRY the situation is different. We are now outside the range. The new formula trims soybean meal and brings in other protein sources and more synthetic amino acids. If we keep the old formula, we keep producing a feed that is more expensive than it needs to be at the new price. At this point a new solve and a new formula for production are the right call.
Set a threshold
One method that works well in practice is to trigger a formula change by savings rather than by price. When you solve with the new prices, you see how much you save per tonne compared with the current formula. If the saving is below a set threshold, say 30 or 50 TRY a tonne, you keep the formula and wait for the next planned update. If it is above, you change.
The right threshold differs from mill to mill. In a high-volume mill even 20 TRY a tonne adds up to a large sum each month. In a small plant, the disruption of frequent changes can easily eat that saving. What matters is to set the threshold once and make sure everyone knows it, so purchasing, formulation and production follow the same rule.
Which price are you solving with?
A common mistake in volatile markets is solving with the wrong price. With soybean meal in the warehouse bought last month at 17,000 TRY, do you solve at today's 18,500 or at stock cost? There is no single right answer, but you need to be consistent. Most nutritionists solve with replacement cost, the price you would pay to buy the ingredient again today, because every tonne you use today is a tonne you will have to buy back tomorrow. Stock cost belongs in accounting and profitability.
Contracts need to be taken into account too. If you have committed to buy a fixed quantity at a fixed price, using that quantity becomes a constraint on the formula. The cheapest formula is then the one that has to consume the contracted amount. Planning that solves several feeds together against shared stock gives a much more accurate answer in these cases than solving formulas one by one.
The hidden costs of frequent change
A formula change has costs that do not show on paper. A new ingredient can change pellet quality, colour and smell, and some customers notice right away and ask. Feed labels, batch sheets and the batching system all need updating. All of that takes time and adds room for error.
Animals can react to sudden changes as well. Feed intake in ruminants and in fish in particular is sensitive to changes in the feed. A drop in intake lasting a few days can easily outweigh the cost saving from the new formula. That is why some mills set a constraint on how much the inclusion of certain ingredients may change from one period to the next.
A practical rhythm
In the field we see this rhythm work well. Once a week, on a set day, formulas are solved again with all current prices and analyses. If the result clears the savings threshold, the new formulas go to production. If an ingredient's price leaves its range during the week, an interim solve is run only for the formulas that ingredient affects. Otherwise price changes go into the cost records and the formula stays.
This rhythm needs two pieces of information: the current price range of each ingredient and the saving a new solve offers over the current formula. Parametric price analysis in OptiFormula shows the price break points of the ingredients in use. Formula version history and the cost archive let you see later which formula was produced on which date and at what cost. That record is also valuable for understanding what worked when the next price swing comes.
Prices will always move. The point is not to react to every move, but to know which move actually calls for a decision. Price ranges and an agreed savings threshold take that decision out of personal guesswork and turn it into a rule everyone understands.
