Security of Scale

As one of America’s largest biorefiners moves forward with two more installations of Fluid Quip Technologies’ 50% protein technology, critical production redundancy is in hand. Products with even higher protein levels are already in the pipeline.
By Tom Bryan | November 29, 2020

This fall, when Green Plains Inc. announced plans for a third installation of Fluid Quip Technologies’ patented Maximized Stillage Co-Products technology—while its second installation was just breaking ground—other U.S. producers with the same systems took the news well.

It seems counterintuitive that ethanol plants already possessing MSC technology would welcome more of the trademarked product it yields—Still Pro 50—into the marketplace, but scale matters in the feed business and volume can be a rising tide that lifts all boats.

“It’s about resiliency,” says Keith Jakel, sales and marketing manager at FQT. “Having multiple plants producing the same product provides a secure supply for end users. With the MSC protein system, end users are assured of a consistent product; regardless of whether the product comes from one plant or several, you’re assured of a reliable, consistent supply. Redundancy brings confidence and confidence brings product value.”

Jakel says the new volume of MSC 50% protein product, including what Green Plains will produce when all three of its MSC facilities are online, will boost total North American production from 350,000 metric tons (mt) per year to more than 600,000 mt annually (Green Plains alone will produce 200,000 mt).
FQT nutritionist Pete Williams explains. “For whatever reason, if product isn’t available from one source—say, production falls down at a location—we can get the identical product somewhere else. It’s all about having resilience in the supply chain, and we absolutely have that now,” he says, pointing out that six MSC systems are in operation and three are under construction. “In this industry, you need to be able to supply a minimum of 100,000 tons of material annually before you get what we call ‘bin space,’ and a lot of new technologies simply can’t reach that level. We’re there, and it’s exciting.”

‘Plan B’ Pledges  
While even greater volume will be needed to achieve marketplace resiliency on a global scale, the larger MSC adopters like Green Plains believe Still Pro 50—a unique brand of what the feed industry defines as “corn fermentation protein”—is already achieving volumes it can sell around. On a recent FQT webinar, Walter Cronin, Green Plains’ chief commercial officer, agreed that industry nutritionists need a sound guarantee of scale and supply redundancy. “We need to be able to say that, if we have interruptions—a weather event or whatever—that we have a plan B,” he said. “That gives the nutritionist confidence to consider the product, and then ultimately start including it in their ration.”

As Green Plains completes its second installation of MSC at its Wood River, Nebraska, biorefinery—with its first installation online in Shenandoah, Iowa, and its third breaking ground in Obion, Tennessee—the company will achieve solid internal redundancy, but Cronin said wider industry adoption of MSC is needed to reach even broader product dependability. Ultimately, Cronin said, more plants coming online with MSC technology, both its own facilities and others, should push demand higher—not lower. “It should drive greater demand,” he said, stressing that Green Plains is not concerned about overproduction.   

Cronin said Green Plains welcomes industry nutritionists, and even executives from other biorefineries, to tour its Shenandoah MSC building, along with the company’s co-located subsidiary, Optimal Aquafeed. “It’s a fascinating world—true biotech—that we are endeavoring to harness there, along with our enzymes and yeast partner Novozymes. We are adapting new enzymatic processes to achieve higher and higher protein levels.”

Still Pro 50 is currently achieving 50% to 53% protein and at times being benchmarked alongside 48% soy products. Williams says it probably shouldn’t be. “We’ve got more protein than soy—it’s a great base protein—we don’t have the anti-nutritional factors of soy, and we also have yeast in the product, so we should be looking at a significant premium over the current soybean meal price, which is currently $350 to $400 per ton, or about three times the value of DDGS.”

J-Curve Values
Green Plains has lofty value ambitions for its ultra-high protein feed ingredient. The company is in pursuit of what it calls the “J-curve of protein opportunity.” Cronin said Green Plains wants to not only achieve redundancy with its high-protein products, but create multiple versions of the feed at different protein levels and price points: 53% protein at about $500 per mt; 56% protein at approximately $800 per mt; and, potentially, 60% protein at an even higher price. “We think we can do this in conjunction with other corn biorefiners,” he said. “If you want to come up to these values with us, we are glad to bring you along.”

Green Plains’ interest in taking other producers under its MSC wing sits well with FQT, which introduced the platform to the industry over a decade ago. On the webinar with Cronin, Michael Franko, FQT partner and vice president of business development, reflected on the early days of MSC’s development when large companies like Tyson Foods expressed interest in MSC 50% protein, but had concerns about its volume. “They said, ‘Call us when you have six plants running,’” Franko said. “There was that barrier to entry. They weren’t going to make bin space until we had true redundancy.”

Neal Jakel, partner, strategy and technology at FQT, agreed that the single-source facility days were challenging. “Our first MSC-producing installation was 10 years ago, and it took five years to get the second plant going,” he said. “It was a slog to get into certain markets, and we were priced substantially below soybean meal for a time, until we achieved that redundancy. Now, with plants in three different states—soon to be more—and two different countries, things are different.”

Joe Ward, FQT senior nutritionist, says he understands why buyers would be cautious about supply disruptions. “It’s the worst thing in the world if you adopt a new product and start using it in your operation widely, and all of a sudden it isn’t available,” he says. “That’s a disaster, not only to the formulator, but also down the line, because performance values can be changed, and that will make a producer reluctant to come back to the product when it’s available.”

But Ward stresses that volume is only part of the supply resiliency story. “Beyond scale, your product has to be repeatable and uniform—you need consistency—not only within a plant but between plants,” he says. “So, if you end up with one plant that’s not able to produce, or runs short of material, there will be another plant that has a virtually identical product that can be supplied.”

In addition to the challenge of scale, FQT and its MSC marketing partners, which include Flint Hills Resources and Green Plains, are making nutritionist outreach a top priority. Cronin said Green Plains is intent on reshaping how feed nutritionists view its ultra-high protein product. He explained on the webinar that it’s more than just saying a product is 50% protein and different, it’s showing customers that downstream considerations are being taken to manufacture, store and ship the product.

“The focal point of a dry mill was to produce 2.6 gallons of ethanol and, later, we evolved to 2.9 gallons. But DDGS was an afterthought, and that cannot be the future,” he says. “We have to convince nutritionists that what we have now is a product that is not DDGS, but something completely different.”

DDGS Improved
Williams agrees with the need for strong coproduct delineation, but says it’s important to differentiate high-protein from DDGS without downplaying the latter coproduct’s role. “We understand that DDGS is a valuable product in the marketplace and we’re not trying to replace it,” he says. “Rather, we’re adding value to the marketplace. What we are doing is not going to remove or downgrade the value of DDGS.”

In fact, Keith Jakel says FQT research shows that post-MSC DDGS is enhanced compared to DDGS from non-MSC facilities. He says the MSC process effectively lowers the amount of variability in the residual DDGS and leaves it nutritionally better off. “We have done the studies and have the proof on this,” he says. “Most plants are running at 110% to 130% of their dryer design rate—cranking the heat up to run harder and faster—which essentially denatures the DDGS. When we take that load off the dryers, they can run the way they’re supposed to, which produces a residual DDGS with a lighter color, and protein that isn’t denatured. So you end up with better protein and amino acid profiles than if you wouldn’t have taken any protein material off at all. We believe you will begin to see producers selling their residual DDGS at higher values.”

Jakel says the MSC process diverts about 30% of the coproduct volume to the high-protein stream, leaving 70% as reconstituted DDGS. “One of the very first questions producers ask is, ‘What will it do to my DDGS, because I don’t want to lose that value?’” Jakel says. “They want to be certain that if we’re taking something out, the remaining product still has equal or improved value.”

To demonstrate the retention of DDGS value, FQT collects a DDGS sample weekly for 12 months before an MSC technology installation, and again after startup. This gives the plant data they can use to show their current and future customers of DDGS what their product looked like before and after MSC installation. “What we’re seeing is, first, greater consistency in the DDGS product,” Jakel says. “That’s big because, remember, the greatest detractor of value is fluctuating product consistency.”

Functional Factors
In addition to differentiating high-protein coproducts from DDGS, Neal Jakel says it is equally important to FQT to distinguish other 50% protein feeds from Still Pro 50. “There’s a common misunderstanding that all of these products are similar, but that’s a fallacy and couldn’t be further from the truth,” he says. “There’s a difference between the 50% proteins being produced by chemical extraction versus mechanical extraction, and there are even clear differences between the technologies using mechanical separation. For example, some pre-fermentation systems have larger fiber particles, which can limit the type of species the feed is suitable for.”

Ward adds that FQT’s technology is a “true mechanical separation” that doesn’t rely on chemicals or flocculating agents to separate out protein. “That’s critical because flocculants and additives can change the digestibility, and value, of the end product,” he says, explaining that flocculants have a nitrogen composition that, when added to a feed product, appear to boost crude protein value but, in reality, do not improve amino acid availability in the feed. “So those two numbers become very distant,” he says. “You could have 50% crude protein, but 2%, 4%, or more, could be registering as protein from the nitrogen coming off the flocculant, which has no value to swine and other monogastric animals. You have to really understand what kind of protein you’re getting.”

And because FQT’s process captures the yeast produced during the ethanol fermentation process, it has enhanced functionality. Nutritionists refer to this type of benefit as an associative effect of a feed ingredient. With soybean meal, for example, there are known anti-nutritional factors that limit the value and performance of soy protein. “The associative effects of the MSC product in a formulation doesn’t have those anti-nutritional factors,” Ward says. “Oppositely, it has desirable functional characteristics from the yeast component that boosts value and performance across species.”

The beneficial effects of Still Pro 50, Neal Jakel says, has been validated in robust feeding trials—the company has done more than 30 of them with various institutional partners—which takes the guesswork out of determining the product’s nutritional profile and value. “In the end, that really matters to ethanol producers installing these technologies because they are counting on an ROI that is based on those values.”

Readable Dossier
Every feeding trial FQT does is documented in what Williams describes as an abridged translation of the work. “We have easy-to-understand summaries of every feeding trial we have done, all compiled into a dossier,” he says. “So, if someone in Asia calls up and says, ‘Pete, can you send me the details of your Atlantic salmon trial, your shrimp trial and your tilapia trial?’ I can say, ‘Yep, I’ll get it right off to you.’ The information is there. It’s readable and we’re happy to share it with our customers and partners.”

Williams says ethanol plant decision makers can read the Still Pro 50 dossier, and if their nutritionist wants to take a deeper dive into the nutritional data, FQT will supply them with the detailed findings. “This gives us a level of credibility in the industry that is really quite unique,” he says.  

Continually sharing information about Still Pro 50 is important because, a decade into MSC’s development, FQT is still making discoveries about both the process and the product. “We’ve amassed a great deal of knowledge, but as we move forward, it’s clear that we will continue to make more nuanced discoveries about the product and its full potential,” Ward says.

Williams shares an example from a recent feed trial. “We replaced soybean meal in a broiler diet—with a specification to achieve optimum performance for broilers—and achieved better performance than anyone predicted, with a 10% inclusion of Still Pro 50,” he says, explaining that two growing days were eliminated to achieve broiler slaughter weight, potentially allowing the customer to produce eight flocks a year rather than seven. “That’s just one current example of the sort of thing we’re discovering this product can achieve.”

Keith Jakel shares another example. “One of the very first plants making Still Pro 50 was selling the product to an egg layer as a protein supplement,” he says. “It turns out, the egg layer had to stop using the protein because their chickens had increased the size of the eggs they were laying and they were off-spec for the contract they were trying to honor. So, that sort of situation, for example, tees up a feeding trial that looks at a laying hen—with the objective of examining egg size—which is important to an egg cracker that might just need volume and not size. Those are the things that become learning opportunities for everyone. You only get these types of insights through time and a focused approach in bringing a product to market.”

FQT’s commitment to chronicling its feed trials and R&D is somewhat unexpected of an ethanol plant technology provider, but Jakel says it’s a strategy the company has always embraced. “From the beginning, we made a decision to take a different approach to how we brought our technology and products to the market,” he says. “If you look back at the ethanol industry, the industry was almost giving DDGS away at times, so we have been a part of a paradigm shift. We said, from the start, ‘We’re going to bring a technology to the industry that is going to create an additional coproduct, but we’re also going to help create and develop the market for that product.”

Jakel shares a story about an ethanol client hamstrung by dryer capacity issues and stuck overproducing wet distillers grains. “We started talking about our technology and how it could give them various streams and choices—fiber, protein and residual DDGS,” he says. “And as we sat in their boardroom discussing all the possibilities, it was a like a giant light bulb lit up over the entire room when they realized, for the first time, they could control things,” he says. “If they could control the amount of wet feed they made—because of that freed up dryer space—DDGS, protein, oil and ethanol, they could remove themselves from the commodity rollercoaster and become more of a price giver than a price taker. That’s what this technology does. It’s a game-changing technology for the ethanol industry.  It’s a paradigm shift. It puts control and power back into a producer’s hands and lets them decide what markets they’re going to target, what they are going to produce, and ultimately what end result they want to deliver to their shareholders.”

Author: Tom Bryan
Ethanol Producer Magazine