Distillers Grains: Getting Value from Quality

Based on current and potential ethanol production, the United States could see nearly 14 million tons of distillers grains produced in 2008. How can you ensure that your plant will get value for your product in a potentially saturated market? Make it valuable.
By Anduin Kirkbride McElroy | August 01, 2006
Less than a decade ago, revenue from distillers grains comprised almost one-third of the average ethanol facility's total revenue, according to Randy Ives, senior vice president of UBE Ingredients LLC. Of course, that was before the energy bill, tax credits and soaring ethanol markets, so that last year, distillers grains brought in less than 10 percent of the total revenue. Given these statistics, it is easy to understand why an ethanol facility would be tempted to place a low priority on its distillers grains operations.
However, Ives cautioned that current ethanol market conditions will not last forever. "Now is the time to be thinking [about] what you're going to do with your mash stream, as it will return to be a bigger piece of your revenue pie," he said in the June 22 "Disitllers Grains" session at the 2006 FEW. Therefore, ensuring a consistent, high-value product will become increasingly important as the industry approaches—"approach" being a relative word, of course—market saturation in the United States for ruminant consumption. How to achieve this top-quality, and perhaps tailored, coproduct suitable for not just ruminant animals but monogastric species as well, was a key focal point of the session.

Thanks to the growth of the ethanol industry, new technologies and processes associated with dry-grind production have surfaced. According to veterinarian Harold Tilstra, who serves as the national coproducts technical support for Land O'Lakes Purina Feed LLC, changes are found at all levels of the dry-grind process: corn varieties, germ and/or bran separation, eliminating the cooking step, new enzymes, and oil decanting. Tilstra pointed out that the significance of these changes is that each modification—and the precise process step in which the modification is made—greatly affects the nutritional value of the resultant distillers grains.

"There are lots of ways that you folks are creatively trying to capture more value out of your plants—and providing job security for those of us in nutrition trying to work with all these different ingredients," Tilstra quipped. "I don't look at distillers grains products as being good or bad. As long as there's nothing negative as far as toxins or negative feed intake, they're all good. We just have to understand the comparative nutritional value and appropriately place them in their rations."

Tilstra identified 11 different plant feed coproducts that come from various methods within the dry-grind process. He said some facilities produce several of the products, but those with automated systems can reduce that variation within individual plants.
Of course, there is also significant variation between plants; every facility has different profiles and different gene characteristics. "We have about 7,000 samples in our lab that we're working with," Tilstra said. He added that over the years, he has seen products labeled as DDGS with fat content as low as nearly zero percent to as high as 30 percent. In the past three months, there is still variation within protein (24 percent to 29 percent), moisture (9 percent to 14 percent), fat (9 percent to 15 percent), and starch (less than 1 percent to 8 percent). "[The starch] doesn't affect us very much nutritionally, but I think 8 percent starch would be pretty interesting to you in today's ethanol prices as an opportunity loss," he said.

Variation matters because it affects the bottom line. For livestock producers, distillers grains is simply part of a calculated formula—never a requirement—as nutrients are available in many different ingredients. Although researchers have made significant breakthroughs in feeding distillers grains to swine, many producers are still deciding if adding distillers grains into the diet is worth the involvedness it may require. "Adding another ingredient, especially in pigs, was a huge deal because the whole pig feed industry was built around corn, soybean meal and micro-ingredients," Tilstra noted.

Therefore, the product, above all, must offer consistency of quality, quantity and price—especially throughout lifetimes of different feeding animals. "However you can help producers achieve that will definitely place you advantageously in their eyes," Tilstra said. If consistency is offered, Tilstra said, distillers grains is an excellent source of nutritional ingredients and is good to work with.
Ives agreed that consistency is important in order to gain the confidence of the end users, and thus a fair market value. Many of the current problems with DDGS, such as flowability challenges, are the result of many producers viewing it as a byproduct rather than a coproduct. In order to turn this industry from a "buyer beware" market, Ives said and Tilstra agreed, the industry must consider developing standardized testing, a quality standard, a standardized definition and an action plan to accomplish those things.
One group already engaged in developing standards is the Renewable Fuels Association (RFA) Coproducts Working Group, which is made up of several subcommittees. Ives noted that currently there are multiple ways to legally test distillers grains, yet "nutritionists want something so they can compare apples to apples." Thus, the American Feed Industry Association (AFIA) has formed an analytical working group; within the next six months, the committee expects to make recommendations to the RFA Coproducts Working Group, helping the group set priorities for studying various testing methods.

The AFIA also has a definitions working group trying to tighten up standards Ives termed as "loose." However, the group was not able to come to a consensus, so the definitions of the Association of American Feed Control Officials were not changed. Ives said many group members are working behind-the-scenes to establish firmer guidelines.

Whether or not such guidelines are established, the industry needs to continue to invest in the quality of distillers grains, said Chad Kuhlers, plant manager of Golden Grain Energy (GGE) in Mason City, Iowa. To keep up with the demand for ethanol, GGE sought to increase the volume of other saleable products, namely distillers grains, while decreasing the energy used per gallon of ethanol produced. Kuhlers said the limiting factor for the plant was the distillers grains handling systems, such as the drying and evaporation systems. These systems are limiting because of the variability of influences, such as exterior humidity and temperature.

The solution lay in an ethanol dryer control application; GGE chose model predictive control (MPC) software provided by Pavilion Technologies. The MPC uses real-time data to ensure that the dryer and evaporation systems always operate within regulatory and equipment constraints. Ives had suggested that mash could not be reworked, but Kuhlers said that reworking is not necessary with this system. A consistent product is produced because GGE doesn't need to react to a lab result, but can predict which operations will be optimal for the mash in real time.

The goal was to increase the production rates without straining the equipment. In addition to increased DDGS and ethanol production, the MPC resulted in a consistent product at lower operating costs. For example, GGE increased the centrifuge feed by 10.6 percent, up from 85 percent. Additionally, the deviation was reduced by 27.26 percent. Similarly, energy usage was reduced by 14.5 percent, and the standard deviation was reduced by almost 47 percent. Kuhlers said an interesting benefit was a 1 percent increase in DDGS moisture. "Everybody likes to sell water at $80 per ton," he joked.

The savings in energy, the increase in ethanol production, and the enhanced quality and consistency of DDGS resulted in an estimated annual value in excess of $2.4 million, Kuhlers said. And that's the bottom line.

Anduin Kirkbride McElroy is an Ethanol Producer Magazine staff writer. She can be reached at amcelroy@bbibiofuels.com or (701) 746-8385.