USDA adds DDGS footnote to supply/demand report

By Holly Jessen | April 11, 2011

Nineteen words were added to a footnote in the World Agricultural Supply and Demand Estimates report, which includes information on the corn used in ethanol. For the first time, the April 8 monthly report on U.S. corn supply and use specified that corn used to produce ethanol also produces by-products such as DDGS, corn gluten feed, corn gluten meal and/or corn oil. In addition, the category that was previously labeled “ethanol for fuel” now says “ethanol & by-products.”

Although it’s not clear if the change was a direct result of a March 15 letter sent to Secretary of Agriculture Tom Vilsack from the Governors’ Biofuels Coalition, the language did appear in the first corn report to come out after he received the letter. In it, the coalition said the USDA was “inadvertently perpetuating” damaging misconceptions by identifying corn demand for ethanol without taking DDGS and the fact that it is used as a high-value animal feed into account. The coalition has been so far mum on the subject pending an expected statement from Vilsack on the wording change. 

The revision is to be applauded, said Geoff Cooper, vice president of research and analysis for the Renewable Fuels Association. It better accounts for the fact that, on a net basis, two-thirds of the corn going through an ethanol production facility comes out the other side as ethanol and one-third as animal feed.

By reporting only the gross usage of corn for ethanol, the implication was that all the corn going into ethanol production resulted in fuel ethanol, Cooper said. This has led to the inflated claim that the ethanol industry is using nearly 40 percent of the corn supply when in fact, if coproducts are taken into account, only 23 percent of the 2010-’11U.S. corn supply and 3 percent of the global grain supply will be used for ethanol production. Cooper also pointed out that the 39 million metric tons of DDGS produced by the U.S. ethanol industry in this marketing year is close to the amount of corn produced by Mexico and Argentina combined. The amount of DDGS exported in 2010 is equal to the amount of corn imported by Mexico—the No. 2 importer of U.S. corn.

On the other hand, Growth Energy and the American Coalition for Ethanol both said the wording change doesn’t go far enough. “This change in wording is an important recognition of how grain is used, both to produce the renewable fuel in ethanol and the livestock feed in distillers grains,” said Chris Thorne, director of public affairs for Growth Energy. “But it still falls short of an accurate representation of the use of distillers grains as livestock feed. Until that use is fully accounted for, we'll continue to see misrepresentations of the fact that ethanol produces a significant amount of feed that goes right back into the food chain.”

ACE has brought up this issue with legislators and the USDA multiple times, said Brian Jennings, executive vice president. For example, in 2009, he presented testimony on this and other topics during a U.S. House of Representatives hearing of the agriculture committee. More recently, ACE President Lars Herseth met with one of Vilsack’s top aides to discuss this issue and others during ACE’s annual third annual fly-in to Capitol Hill. The change in wording is a good start. “However, these reports do not yet clear up for the uninitiated the difference between the gross and net bushels of corn used for ethanol,” Jennings said. “Ethanol producers return a full one-third of the corn processed back to the feeding sector.” He added that lazy reporting on this issue has perpetuated the food vs. fuel myth. “If the USDA properly noted that ethanol’s true, net use of corn is fully one-third less than what many have reported, that would be most helpful.”