Pelleted Feed Innovation from Nebraska

Big in ethanol and corn, Nebraska's corn stover and distillers grains resources are being tapped for new, enhanced feed products from two emerging companies. This feature appears in the February print issue of Ethanol Producer Magazine.
By Ann Bailey | January 23, 2017

Two Nebraska companies are turning pellets into profit. Pellet Technology USA in Gretna and Platte Valley Distillers in Ord are making pelletized feed, one from corn stover and the other from distillers grains. Pellet Technology’s commercial plant was expected to have its first commercial-scale plant online in January enhancing stover for feed. Platte Valley has the pleasant challenge of trying to keep up with demand for its distillers pellets. Ethanol Producer Magazine checks in with management at the two companies to learn more about the processes and progress.

Pellet Technology USA
Founded by Russ Zeeck, an ethanol and soybean processing industry veteran, Pellet Technology USA has operated its commercial demonstration facility plant in Gretna, Nebraska, for several years. The first production facility, coming on line in York, Nebraska, was built in collaboration with ICM Inc., says Joe Luna, PTUSA business strategy manager. The York plant has a production capacity of more than 200,000 tons annually, using corn stover and other ethanol coproducts to make pellets used for a variety of livestock feeds “We have different products for cow-calf, for growing, finishing, confining,” Luna says. Pellet Technology is focusing on direct distribution of the pellets to its customers, he says.

The company purchases the corn stover used in the pellets from farmers located within 50 miles of York. “We receive large square bales,” Luna says.  PTUSA has crews available to bale the stover, if the producers prefer that. “We have some farmers who have the next generation of their families taking roles on the family farm, and they like to do it themselves, and we have others who like to have somebody come and bale the fields for them,” says CEO Randy Ives.  Once the stover is at the plant, Luna says, “we have a patented handling, processing and logistics system. Pretty much everything is proprietary from the way we store the corn stover bales, to the way we’re adding value to them inside the facility, to the way we’re delivering them to customers on the back end.”

Another part of Pellet Technology’s process that is unique is that it has a “very safe and very scalable grinding and particle sizing process,” Luna says. There is a history of inconsistency when it comes to grinding corn stover, but Pellet Technology’s process breaks tradition. “You have a lot of inconsistency. You have a lot of waste and dust, so we have a process that eliminates that and allows us to take very big pieces of machinery and turn them into precision instruments. Part of that was learned through trial and error.” A few years ago when Pellet Technology USA conducted its initial feed trial at the University of Nebraska, the company learned that it actually had too much control over the particle size, Luna notes.  “We can make a consistent particle size very, very small, but for some animals, such as cattle, a longer fiber is needed.” Pellet Technology learned how to adjust particle size, depending on the type of livestock being fed, Luna said. The company’s pellets contain different ingredients, based on the species and type of ration.

Pellet Technology may expand into supplying pellets for fuel production, but for now is focusing on livestock feed. It does not plan to license its pellet production technology. “One of the things that we want to bring as value to the market is consistency. We have plans to be owners, operators of the facilities in order to bring the most consistent feed to our customers,” Luna says.

“We plan on starting to look toward our next location in 2017 with the idea that the following year the plant could be sited and built, according to what we learned from the first plant, and operational sometime in late 2018,” Ives says. The second plant will likely be located in the Midwest.

Ives believes that Pellet Technology USA will benefit its farmer customers who sell the corn stover to the company by giving them a market for their stover that has become a headache for some farmers as yields have grown, Ives notes. “Some of the producers will see checks of $30, $40 to north of that, per acre. Additional revenue really makes a difference in these hard times.  We can take something that traditionally has been seen as low value and add value, creating a product that is unique in the industry.”  Producing pellets from corn stover and ethanol coproducts, of course, also is beneficial to the ethanol industry, Ives notes.  “My background has been ethanol for 20-some years, and before that, soy crush. All the work that has been done turning distillers into nationally known, and globally known, value-added feed has been a lot of fun. This is the next generation. We truly are creating a next-generation feed where abundant ag residues and coproducts of the future can be combined in new ways that are more sustainable than today.”

Platte Valley Distillers
Customers of the cubes and pellets produced at Platte Valley Distillers in Ord are buying them as fast as the company can make them, says co-owner Tom Kruml. “Everything we can produce is getting sold.” Platte Valley Distillers’ uses a patented process to make cubes and pellets. The process increases the density by 2.3 to 2.5 times in cubes that are 7/8 inch in diameter and from 2.5 to 3 inches long and pellets that are 7/16 inch in diameter and about an inch long. The products contain no additives, relying on corn oil content to help seal the product, unlike most other cubes and pellets that contain a binder or agent, Kruml notes. The company has patented the technology that facilitates pelleting without binders. “It literally is pure distillers grains and that’s what separates these cubes and pellets apart from anything else that is out there,” he says. The pellets and cubes have a shelf life of up to three years, Kruml adds.

Platte Valley Distillers buys most of its feedstock from ethanol plants across Nebraska. The company has the capacity to produce 30,000 tons of distillers grains products annually. Kruml’s company markets the cubes and pellets through Furst-McNess, which sells them to cow-calf producers and ranchers who background and creep-feed calves. The pellets and cubes are shipped to customers in 12 states including Texas, Idaho and Wyoming and exported to China, Canada, Mexico and Korea.

Dryer Innovation
Besides producing and marketing pelleted feed, Platte Valley Distillers also is working to develop a new drying system for distillers grains. A prototype is being developed at the company’s processing plant in Ord, Kruml says. “We actually have it in place now, where we can take wet or modified distillers grains and not use a conventional grain dryer like the ethanol plants do, to make it into dried distillers grains, then produce the pellets and cubes.”  The process reduces energy costs significantly.
Most grain dryers are heated with natural gas or propane, but Platte Valley Distillers’ drying process is different, says Gaylord Boilesen, production manager and co-owner. “We’re using electricity to heat the extruder, but once we get it started, we heat a lot of it by just sheer energy between the screws and the extruders.” The screws in the extruder barrel turn in opposite directions, which pinches the commodity. Similar to a food extruder, heat energy is created as the distillers grains are forced through the screws. “We heat and release. When we release it, we take pressure off which is released into the air as steam,” Boilesen says, adding that the drying process doesn’t run nearly as hot as a conventional dryer, reducing operating costs.

Platte Valley Distillers developed the drying process so it could take wet and modified distillers grains and remove the moisture so they could be classified as DDGS before being made into pellets and cubes, Kruml says.  “We’re expanding the types of distillers grains feedstocks we can use because a lot of the ethanol plants do not have the drying capacity to make dried distillers grains. They can make wet or modified and that’s it. What we’re trying to do is open up the availability of the feedstocks.”

Initially, Platte Valley Distillers focused on production of the pellets and cubes, but now perfecting the drying process has become important to the company, Kruml says. “There are a number of ethanol plants that are taking a look at that.”

“There is interest,” Boilesen concurred. He believes the drying process has potential to be a winner with ethanol company clients. The process is environmentally friendly and, because it doesn’t have to heat the distillers grains to as high of temperatures as dryers do, the nutritional value of the grain is maintained better than if it is dried, Boilesen says.

Author: Ann Bailey
Associate Editor, Ethanol Producer Magazine
[email protected]