Drought spurs increased sales of distillers grains product

By Holly Jessen | September 13, 2011

From 2010 to 2011, SweetPro Feeds, a company that makes vitamin and mineral licks for cattle containing condensed distillers grains, has seen a 40 percent increase in sales. Company President Bob Thornberg told EPM a significant amount of the spike in sales can be attributed to drought conditions, especially in Oklahoma and Texas, where cattlemen are looking for products to extend dwindling supplies of forage and hay. “I would say probably a third of our growth is probably influenced by that,” he said. “No more than half of it.”

In Oklahoma, large numbers of cattle have been sold off due to drought and extreme heat, said Scott Dewald, executive vice president of the Oklahoma Cattlemen's Association. Due to lack of forage or hay, and in some cases, lack of water, estimates are that 27 to 30 percent more cattle have been sold off compared to a year ago. “That’s a pretty huge number,” he said.

In some cases, cattlemen have transferred cattle to other states, cut back their herds to their finest genetic bases or sold off all their stock. The question mark is whether those cattlemen will be able to get back in the business, particularly younger or older cattlemen. The other unknown is just how long the drought will last. On Sept. 13 temperatures in Oklahoma were expected to hit 101 degrees, a time when it’s typically in the 80s. Southwest Oklahoma has had 100 days with temperatures more than 100 degrees. “We’ll always be a beef cattle state but this is extremely stressful for our producers,” Dewald told EPM.

That extreme heat and lack of forage has created an opening for SweetPro Feeds, Thornberg said. The products were already well used in both states and more customers are now giving the distillers grains based product a try.

SweetPro Feeds started production in 1991 and secured six patents for its products—all of which contain distillers grains—between 1994 and 2004. Today the company has two production facilities in Wallhalla, N.D., and Horton, Kan., where it produces feed supplements for livestock including calves, cattle, sheep and horses. If the recent growth in sales proves sustainable the company could expand again. “We expect we’ll be needing a third and eventually a fourth location,” he said. “Not right now, but pretty soon.”

Unlike traditional molasses licks, which can melt in extreme heat, SweetPro supplements contain higher levels of protein and fat. The products also contain yeast and enzymes. Distillers grains are used as a carrier in SweetPro products, providing binding and aroma benefits. One of the big benefits is that distillers grains are more easily digestible for ruminant animals because it’s a pre-fermented product. “Our experience has been that in a maintenance diet with a beef cow, that cow will eat 25 percent less hay than it would if it wasn’t being supplemented with our product, because they get more out of the hay they are eating,” he said. The 25 percent figure comes from a university-led feed trial.

In most of the cattle feeding industry, such as dairy cows and beef feedlots, distillers grains is fed as a raw energy source. “Our approach is really quite different—it’s not a high percentage of the diet,” Thornberg said. “It’s just part of the carrier to deliver their vitamin and mineral supplement, but it gives them a boost that keeps that microbial population such that they digest their forage better.”

The beef cow-calf industry is “getting their own groceries” in a pasture, he pointed out. In order to reach this market the company came up with a way to solidify distillers grains so it can be brought to the animals. “We’re delivering kind of a one-two punch,” he said. “It’s not just a way to get the vitamins and minerals into them, it’s also a way to deliver extra protein and it’s given them a digestive benefit that helps them get more value out of the limited forage that they have.”

Thornberg believes the cattle industry is the greatest beneficiary in the growth of the ethanol industry, despite the fact that the cattle industry doesn’t look at it that way. Thornberg thinks distillers grains is a big benefit for cattlemen and that they haven’t yet fully understood how the product can be used. “They’re seeing it from traditional terms in that they see it competing for the grain that they are accustomed to getting,” he said. “As grain is more and more expensive the distillers value is coming more into the forefront.”