Technology implementation is an investment decision that is not always easy to make. However, the process is simplified, especially in a marketplace as volatile as today’s, when your approach considers important parameters including extent of research, brand name recognition, investment price, value return, risk and ease of implementation.
When this approach is followed, Micro-Aid® always stands out from the crowd as the investment choice that returns the greatest value in all feed, all the time.
When one considers these decision-making parameters further:
- Investment…Generally speaking, the opportunity for return on investment (ROI) increases as investment cost decreases (assuming adequate technology research). Investment price should consider both unit cost and application rate. There are very few technologies like Micro-Aid® available to producers today with both a low investment price and that are as well researched.
- Value-Return…Extensive research over time best determines value-return of a technology. Technologies that consistently demonstrate a significant performance improvement that generates values well in excess of the cost are considered to have a high value-return and offer the best potential for ROI.
- Risk… For technology investments, we should also rely on research to determine the probability of success. Technologies that have a low investment price and demonstrate a high probability of success with a high value-return are considered to be low risk. Micro-Aid® technology is low risk with a high value-return and as such, presents a golden opportunity on the farm.
The Analytical Process…The following analysis demonstrates the investment in Micro-Aid® as compared with the risk of return for a swine, beef, dairy and broiler operation. This analysis evaluated four points, including 1) down side risk, 2) zero risk, 3) upside risk at low response, and 4) upside risk at average response. The Micro-Aid® Value Proposition Model “decision tool” was used to perform the analysis and generate the following figure. Current input costs and market prices were assumed, while conservative retail pricing was used for Micro-Aid®. Added profitability was not included for improving manure nutrient value.
In the chart below, risk was evaluated using the economically important traits of average daily gain (ADG) and feed efficiency (F:G) (swine, beef and broilers), stillbirth and pre-weaning mortality reduction (swine) and milk yield increase (dairy). These analyses were then combined across species to create a single chart that is representative of each specie with the relative bar height representing expected return on investment.
It should be noted that this analysis was conducted during a period when production inputs were relatively low and market values relatively high across all species. It should also be noted that as markets change, trends remain similar across species although the magnitude may change.
Down Side Risk: The left-hand data in the above figure shows that if Micro-Aid® is included in all feed, all the time at full retail pricing and no benefits are attributed to profitability, the only down side risk is the associated low investment cost. Remember that environmental benefits and nutrient value of manure were not considered in this analysis, but would add additional value. Note that Micro-Aid® has a very low down side risk across species.
Zero Risk: The process identified how much improvement in performance is required to cover the investment in Micro-Aid®. The second set of data in the above Figure demonstrates this “break even” or zero risk proposition. With extensive research databases demonstrating consistent performance benefits, minimal performance improvements are needed to cover the the investment cost of Micro-Aid® for the entire feeding period. Compare this minimal level of improvement needed to achieve zero risk to the typical level of improvement in one of our extensive research databases and the security of nearly “zero risk” is offered for including Micro-Aid® with current economics!
Upside Risk at Low Response Range: This point evaluated the upside risk possible if performance was attained in the low range of performance from proprietary research. The third column of data in the above chart shows a large return even at the lower end of the research response curve. Again, low investment for a high return, even at the low end of the research documented performance improvement!
Upside Risk at Average Response: When using the assumptions for performance improvement consistent with the average response in extensive controlled research over time, Micro-Aid® provided a highly profitable return as demonstrated in the above Figure. Upside risk potential is very high!
Decision Point…If you have ever considered using Micro-Aid® technology, now is the time. With today’s economics the downside risk is small and requires minimal performance improvement to offset that risk. On the other hand, the upside risk is huge even at the lower end of research demonstrated performance improvement. This represents the ideal financial investment with low risk and high return. Timing has never been better for Micro-Aid® in all feed, all the time!
The value return for Micro-Aid®, as demonstrated by an extensive research database, has always been very high. In addition, the investment cost, even at the highest retail has always been low. With these criteria in mind, the risk analysis for adopting Micro-Aid® technology clearly demonstrates a financial investment opportunity with consistently low downside risk and the potential for tremendous upside risk. This makes Micro-Aid® in all feed, all the time an essential element in any total farm management program designed to optimize financial return.