DDGS discussed as 'major success story' during Export Exchange

By Holly Jessen | October 25, 2012

For some, it’s all too easy to lose sight of the significant contributions made by ethanol’s corn coproducts used as feed ingredients, the Renewable Fuels Association’s Geoff Cooper told attendees of the 2012 Export Exchange. The vice president of research and analysis was one of several people that spoke on the topic at the conference on Oct. 23.

Ron Gray, secretary/treasurer of the U.S. Grains Council and an Illinois farmer, introduced the topic, calling distillers grains a “major success story.” Distillers grains and other coproducts are the reason RFA is a cosponsor of the Export Exchange with the U.S. Grains Council, Cooper pointed out, adding that about 25 percent of U.S. production has been exported in recent years. “The American ethanol industry produced nearly 39 million tons of nutrient-dense animal feed in the 2011-’12 marketing year, meaning the ethanol industry has surpassed the U.S. soybean crushing industry in terms of feed production,” Cooper said.

Due to the U.S. drought, corn use has projected to fall to the lowest level in three years, which means less distillers grains will also be produced. Cooper and another speaker, Bob Wisner, professor of agricultural extension economics at Iowa State University, both said production was expected to decrease by 10 percent in 2011-’12, compared to the previous marketing year. If a waiver of the renewable fuel standard were approved, it could be an even bigger reduction, Cooper said, pointing to a recent study.

Distillers grains offers a substantial cost savings over soybean meal, Wisner pointed out. (See chart.) That’s the case currently, even though distillers grains prices have been closer to corn prices than has been historically typical, a trend he expects will continue for a few months. The prices have been driven up due to tighter supplies of soybeans and soybean meal due to drought but he expects prices will drop back down with the return of normal weather patterns in the U.S. and South America.

Jerry Shurson, a professor at the University of Minnesota’s Department of Animal Science, talked about how narrow margins are prompting ethanol producers to search for ways to increase efficiency, reduce production cost and increase the diversity of product offerings and revenue. He mentioned new variations on distillers grains, giving examples of some that were not implemented widely or didn’t survive long term. Possible new coproducts on the horizon include corn coproduct blends, ingredient enhancements added to distillers grains and more branded coproducts for specific targeted markets. He also mentioned a new yeast strain, which could alter the composition of distillers grains. Finally, the coproduct produced in isobutanal or biobutanol facilities will be different from corn-ethanol coproducts, although it’s not yet known exactly how.

Corn oil extraction is a technology that has changed the composition of distillers grains, Shurson added. About 60 to 70 percent of ethanol plants extract about 30 percent corn oil, using a backend process. Crude fat content ranges from 5 to 15 percent, with most in the 8 or 9 percent range, he said, adding that the industry could extract 65 to 70 percent corn oil, but that technology hasn’t been widely implemented.

A U of M study found that crude fat content isn’t an accurate predictor of metabolizable energy (ME), something that initially surprised the researchers. Following that discovery, the researchers created an ME prediction equation for low-oil distillers grains. He also pointed to a study at the U of M that found feeding low-oil distillers grains to poultry had no effect on layer performance, egg weight or feed conversion. A study at South Dakota State University found that feeding de-oiled distillers grains (different from the corn oil extracted coproduct) actually produced better results for dairy cattle. On the other hand, a University of Nebraska study found low-oil distillers grains isn’t as good for feedlot cattle as the coproduct which has not had corn oil extracted. “At the end of the day, this whole business about reduced-oil DDGS isn’t having as dramatic effect as we once thought,” he said. In answer to a question from the audience, Shurson said a study of swine showed the composition of distillers grains with corn oil removed and then added back in actually had a higher energy content than distillers grains that had never had the corn oil extracted.