MGP Ingredients will resume ethanol production at its fire-damaged plant in Atchison, Kan. by mid-December. An explosion damaged the facility Sept. 13. The company, which changed its name from Midwest Grain Products, Inc., in early October, has determined that the explosion occurred when vapor ignited in the still house of the three-story wet-mill.

MGP sets restart date

This month Minnesotans mourned the tragic loss of Sen. Paul Wellstone (D-Minn.), an unbowed advocate of liberal politics who died with his wife, daughter and five others in a plane crash Oct. 25. 
 	The death of Wellstone, 58, came just 11 days before the critical midterm elections that had him locked in one of the nation's fiercest Senate races against Republican Norm Coleman.
 	Wellstone supported ethanol, and many of his best friends in Congress did too. Senate Majority Leader Tom Daschle (D-S.D.) remembered Wellstone as "the soul of the Senate" and said the nation "has lost a fearless public servant and tireless advocate for justice." The day of the fatal crash, fellow liberal Sen. Tom Harkin (D-Iowa), broke down in tears in front of TV cameras before he memorialized his closest friend in the Senate. "Paul truly had the courage of his convictions and his convictions were based on the principals of hope, and compassion, the Good Samaritan, helping those left on the roadside of life," he said.
 While Wellstone was not always as openly passionate about ethanol as he was healthcare, civil rights and labor, he helped Minnesota ethanol producers when it counted the most.	
 	
 He came to the Senate in 1990, while the Senate was shaping the influential Clean Air Act and the subsequent Regulatory Negotiations that gave the industry a boost. In 1997, Wellstone co-sponsored legislation to extend the ethanol tax incentive through 2007. More recently, he was a member of a Senate panel that fought diligently for a nationwide ban on MTBE. 
 	
 "The MTBE additive is dangerous to the environment and should be prohibited, but ethanol usage ought to be increased," he said in Washington two years ago. "Increased usage of clean-burning ethanol will help protect the environment. . . and help Minnesota's struggling farm economy."
 	
 When former President Bill Clinton left office in 1990, Wellstone praised him for not granting California a waiver from the reformulated gasoline (RFG) requirement of the Clean Air Act, saying, "This is a major victory for Minnesota's farmers and the cooperatively owned ethanol plants in our state."
 	

 Wellstone was among the first lawmakers to call for a national renewable fuels standard (RFS) - currently being decided in Congress - that would expand the role of domestic, renewable fuels such as ethanol and biodiesel in the nation's energy policy. 
 	
 Wellstone always fought for what he called the "little fellers" and he constantly hounded big business and big oil interests. 
 	
 "Big oil doesn't own me," he said in a recent political debate. "I'm for alternative energy. When we import energy, we export dollars. We need biodiesel and ethanol."	
 	
 Wellstone's fellow Senators said even those who did not agree with his political beliefs respected his convictions and his spirit. 
 	
 An online tribute to the late Senator put it best: "Paul Wellstone was one of a kind. He was a man of principle and conviction, in a world that has too little of either. He was dedicated to helping the little guy, in a business dominated by the big guys. We who had the privilege of working with him hope that he will be remembered as he lived every day: as a champion for people."

nLiberal Senator always fought for the the ‘little fellers,' domestic energy over foreign oil

Wellstone fought hard for Minnesota farmers, ethanol producers and renewable fuels

Several of us at BBI International have now read Good To Great, a book written by Jim Collins, bestselling auther of Built to Last. 
 The book ventures into the obvious - and sometimes subtle - differences between a good company and a great one. Collins says a great company is one that has had basically the same challenges and opportunities as their direct competitor, but somehow has managed to excel to greatness, while their competitor remained just good or, what is worse, stagnant.
 	
 While a number of key, and often consistent, ideals separate good companies from great companies, three principles stand out: (1.) Doing what you do better than anyone else in the world, (2.) being involved in something that you are deeply passionate about, and (3.) focusing on what drives your economic engine. 
 	

 Since the last 20 years of my life have revolved around ethanol I was drawn to the parallels between what great companies have achieved and what the ethanol industry has achieved. As we continue to improve the efficiencies of ethanol production there remains little doubt that what we are doing what we are doing better than anyone else in the world. Is there a similar industry driven by individuals more passionate about what they do than those involved in the promotion and production of ethanol? Finally, the growth of this industry over the past decade has clearly demonstrated that this is a business that can drive the economic engine of individuals, communities and rural America.
 	
 For the "good," the temptation is to follow and copy. For the "great," the passion is to lead. 
 	
 The book talks about first getting the right people on the bus and then making sure that those people are in the right seats. What better example can we have for this industry than to do everything possible to make sure that the people on this bus are leaders, unifiers and builders and that they are in the right seat on the bus so they are able to maximize their contribution. 
 	
 To quote Collins, "Good is the enemy of great and if you are satisfied with just success, then you are probably in the wrong line of work."

Will the ethanol industry be good or great?

The Way I See It

CARO, Mich. – Broin Companies completed construction on Michigan Ethanol, LLC this month. The facility is the first ethanol plant to operate in the state of Michigan.
 	
 Michigan Ethanol is located on 43 acres of land in Caro's industrial park in Tuscola County. The plant will process nearly 16 million bushels of corn per year into 40 million gallons of ethanol and 120,000 tons of distillers dry grains.
 	
 "Response by area producers delivering corn to the plant has been outstanding," said Tony Simpson, Michigan Ethanol, LLC general manager. "Michigan Ethanol is looked upon as a new major marketing alternative for area corn producers."
 	
 The plant was designed and built by the Broin Companies, of Sioux Falls, S.D., a provider of turnkey design/build, management and product marketing services to the ethanol industry. "The economic impact in the local and regional area will be significant," said Jeff Broin, CEO of Broin Companies. "Not only has the plant created a new local market for corn, it has provided new jobs and will spend millions of dollars annually in its operation.
 	
 According to Bob Dinneen, president of the Renewable Fuels Association (RFA), the state of Michigan is the fifth largest market for ethanol in the U.S. "We expect much of the ethanol made in Caro to be used in Michigan," Dinneen said at the plant's grand opening.
 	
 Michigan Ethanol General Manager Tony Simpson said the plant will work hard to offer area farmers competitive prices for their corn. "We feel we need to become the market in this area. . . the first place people look to sell their bushels," he said. 

 	
 About 400 growers from 30 Michigan counties invested in the $63 million plant. 
 	
 Michigan Ethanol will employ 39 people and have an annual payroll of over $1 million. Broin Management, LLC, a division of Broin Companies, will manage the facility permanently.

Plant is first ethanol production facility in state

Broin's Michigan Ethanol begins production

OSHKOSH, Wis. - Owners of an ethanol plant in the town of Utica, where construction stopped two weeks ago as a result of a court ruling, have been told they can resume building pending their appeal.
 	
 A Wisconsin state appeals judge said that while Algoma Ethanol, LLC and its investors will suffer financial ruin if construction remains halted, the group that filed suit would not be harmed by the continuation of construction. "Stop the Ethanol Plant Now, " a group that opposes the location of the plant, filed the lawsuit to stop its construction a few months ago.
 	
 "We're working on getting our people back," said Paul Olsen, president of the company that is building the $30 million plant.
 	
 Nettesheim said the appeals process, which can take seven to 10 months, will be sped up in the case.

Algoma resumes building

Monroe, Wis. – Badger State Ethanol, LLC, Wisconsin's largest ethanol plant, was brought online in October as scheduled. 
 	
 Fagen, Inc., the Granite Falls, Minn.-based design-build contractor, spearheaded the construction and incorporated a process-design provided by ICM, of Colwich, Kan. The plant will process nearly 15 million bushels of corn into 40 million gallons of ethanol and 120,000 tons of DDGS annually. 
 	
 Badger State Ethanol, LLC is expected to stimulate more than $100 million in annual economic activity for the region. 
 	
 "We are very pleased with the support the project has received from the local community," said Gary Kramer, Badger State Ethanol general manager.
 	

 John Malchine, Badger State Ethanol board chairman and CEO, added: "A project like this takes a tremendous amount of cooperation from the local community, and we look forward to repaying that debt by providing a new market for farmers, dozens of good paying jobs, and a multi-million dollar economic stimulus to this area. In short, we plan to be good neighbors for years to come."

Fagen, Inc./ICM complete Wisconsin's largest ethanol plant

Badger State Ethanol at nameplate capacity

Broin Companies have completed an expansion of Pro-Corn, LLC near Preston, Minn., increasing annual capacity from 22 to 40 mmgy. 
 	
 "The expansion went smoothly and we were quickly producing at the new level (40 mmgy)," said Richard Eichstadt, Pro-Corn general manager. "This expansion will allow us to provide more value to local farmers and our farmer-owners. We also installed a state-of-the-art thermal 
 
 Broin Companies CEO Jeff Broin added, "We are extremely pleased with the results of the expansion at Pro-Corn. Advancements in technology at our firm, coupled with the dedication of the employees at Broin Companies and at Pro-Corn, have resulted in the successful expansion and startup of this world-class facility."

State-of-the-art thermal oxidizer installed

Pro-Corn completes major expansion in Minnesota

In September the U.S. ethanol industry set an all-time monthly production record of 145,000 barrels per day (b/d), according to data released by the U.S. Energy Information Administration. The previous record of 136,000 b/d was set in August. Production for the month was up 25 percent compared to last September when 116,000 b/d of ethanol were produced.
 	
 "A record number of new ethanol plants have come online this year and it's showing with consecutive all-time monthly production records," said Bob Dinneen, Renewable Fuels Association (RFA) president. "As the use of ethanol continues to grow, it increases gasoline market competition and diversity. That's good news for consumers and it's good news for farmers."
 	
 According to the RFA, the ethanol industry is on track to produce an annual record of approximately 2 billion gallons this year. Currently, the industry has the capacity to produce over 2.6 billion gallons annually.

Over 145,000 barrels per day produced in September

Ethanol industry sets monthly production record

Tri-State Ethanol Company, LLC announced this month that it has reached its own record production rate of 18 mmgy. The Rosholt, S.D. ethanol plant came online in May 2002, and was originally projected to produce 14 mmgy. The plant is located 70 miles north of Watertown, S.D. and employs 29 area people. Engineering and start-up support for expansion efforts were provided by KL Process Design Group of Rapid City, S.D., and Greenway Consulting from Morris, Minn. General contracting was provided by North Central Construction, of Fargo, N.D. 
 	
 All ethanol produced by the plant is marketed through Williams Bio-Energy, LLC.

Tri-State Ethanol Company sets record production

The National Corn Growers Association (NCGA) continued its tireless distillers grains promotion efforts last month. Between successful seminars on DDGS in Minnesota and Texas, Livestock Programs and Information Manager Tracy Snider visited Kansas to continue spreading the good word on ethanol's improved coproduct.
 	

 Snider started her whirlwind tour of Kansas in Kansas City, meeting with Jill Zimmerman of the Kansas Corn Commission (KCC). Snider and Zimmerman traveled on to Topeka to meet with Greg Krissek of KCC, as well as Kansas Livestock Association (KLA) representatives Clayton Huseman, director of feedlot services, and Todd Johnson, director of stockgrowers council and membership. 
 	
 "KCC and KLA have a good working relationship and KLA represents most of the fed cattle in the United States," continued Snider. "KLA is very interested in distillers grains and willing to open the lines of communication regarding the benefits of using distillers grains in feed rations. They are also supportive of distillers grains information seminars in conjunction with Kansas Cattle Day."
 	
 From Topeka, Snider and Zimmerman traveled to Manhattan to meet with Kansas State University Dairy Specialist Mike Brouck and Kansas Dairy Association (KDA) executive Chris Wilson. 
 	
 "As the Kansas dairy population continues to grow," she said, "this will be a good outlet for the wet distillers grains produced in nearby areas. According to the National Agriculture Statistics Service, Kansas is the leading dairy growth state and home to 104,000 dairy cows."
 	
 Snider's group continued on, meeting with Dale Blasi and Dr. Jim Drouillard of KSU Beef Research and Extension regarding the possibility of promoting distillers grains at Kansas Cattle Day and collaboration of work efforts. 
 	
 "There are great opportunities for research collaboration with KSU during the next three years on distillers solubles use and potential carriers to the beef cow/calf industry to push the phosphorous away from concentrated feedlots to pasture and rangeland, which are phosphorous deficient," said Snider.
 	
 From there, Snider traveled to Russell, where she met with Ron Dunbar, plant manager of U.S. Energy Partners, a plant that uses a wheat starch stream. 
 	
 The following day, Snider ventured to Sublette to tour the Santa Fe Dairy, which daily milks more than 4,000 head of dairy cows and feeds 77 tons of corn silage, 10 tons of #2 yellow corn, five tons of DDGS, and 23 tons of flaked corn. From there, she moved on to Supreme Feeders to speak with Mike Viltra, manager of feed procurement, and Mark Miller, the feedlot nutritionist. Snider said the trip was fruitful to NCGA's DDGS promotion program. 		
 
 "Jill and I worked out the details on the Kansas program, pulling samples from various dry mills and how that information can be utilized once it's collected," she said. "Most of the people we talked to were receptive and welcoming of distillers grains certification standards, and those not using the product did have some misconceptions that can be cleared up through education efforts."

NCGA's Snider conducts whirlwind DDGS tour in Kansas

In early October, a University of Minnesota swine nutrition expert and an agricultural marketing consultant with the Minnesota Department of Agriculture (MDA) flew south of the border, to the state of Jalisco, Mexico, to start feed trials expected to lead to a major export market for Minnesota-produced distillers grains.

 	
 The team helped set up at least six different trials to establish the benefit of using DDGS as a livestock feed. 
 	
 Aided by funding from the Minnesota Corn Research and Promotion Council, the Minnesota Corn Growers Association (MCGA) two years ago began working on a project to develop standards and certification processes for DDGS produced in Minnesota. As part of this project, the MCGA partnered with Minnesota ethanol plants in the state as well as researchers such as Dr. Jerry Shurson, to study the role high-grade DDGS could play in swine and poultry rations. 
 	
 Craig Damstrom of the MDA accompanied Dr. Shurson to Mexico. Damstrom has worked with the MCGA and the ethanol plants, which have joined in a program called MinnCert, which will deliver a guaranteed high grade of DDGS, name-branded Norgold, to market it specifically for swine and poultry. 	
 	
 "The plan is to show the most effective way to use DDGS for feed rations for poultry and swine," said Damstrom. The MinnCert program and the Norgold name brand guarantee the customers a process, a quality, a specific maximum level of mycotoxins, a color, and other characteristics. The Norgold concept is a high quality DDGS designed to contain high digestible levels of amino acids, phosphorous, and high fat and energy." 
 	
 Jalisco, located in the Pacific coastal region of Mexico, produces the major portion of dairy, swine and poultry in Mexico. The Minnesota Corn Growers Association donated a rail car full of DDGS for the trials and the Mexican feed and producer groups paid the freight charges, which amounted to a 50/50 split of the costs for the trials, Damstrom said. One Mexican feed company has indicated it would place a standing order for 1,000 tons of DDGS a month, which represents five percent of its total output. Damstrom said that utilizing DDGS for five to ten percent of the feed ration appears to provide the greatest benefit, both nutritionally and economically. 
 	
 "We export distillers grains into Canada, Mexico and Latin America," noted John Schnittker, manager of market analysis for the U.S. Grains Council, a Washington, D.C.-based non-profit group that promotes the export of U.S. grain production. " To date the applications have been in ruminants, primarily in dairy. But in Minnesota, you've got the new generation DDGS, golden in color, more consistent, which can be used in swine. There are commercial swine operations in Mexico that have the potential to use DDGS. It's a question of introducing them to the product and assuring them of a steady supply. The supply situation is quite tight right now, but the continued expansion of dry-mill ethanol plants will change that. Right now, U.S. ethanol plants produce around (3.85) million tons per year." 
 	
 Assuming the trials are successful, the results will be used as part of promotional and educational work that Damstrom will conduct in Mexico the first part of next year to establish this new market for DDGS.

DDGS feed trials begin in Mexico

Project Manager Aaron Fagen, of Fagen, Inc., credits his company's timely completion of Glacial Lakes Energy, LLC to "good people and good weather," two factors, he said, that were critical in bringing the Watertown, S.D. plant online ahead of schedule and under budget.
 	
 Fagen, Inc., of Granite Falls, Minn., completed Glacial Lakes Energy in just 13 months and 11 days, starting July 13, 2001 and grinding corn Aug. 25, 2002.
 	

 Bearing a nameplate capacity of 40 mmgy, the $56 million plant will crank out well over 40 million gallons of ethanol and 130,000 tons of dried distillers grains per year at peak capacity, grinding 15 to 18 million bushels of area corn. The plant has the capacity to store up to 860,000 bushels of corn (a 15-day supply) on site in two 180,000-bushel silos and one 500,000-bushel steel grain bin. Glacial Lakes Energy markets its ethanol through Williams Bio-Energy and ships over 90 percent of it to market via rail. For now, all of the plant's distillers grains with solubles is marketed in the dry form (the plant does not market any wet or modified distillers grains at this time but is open to the option). All of the plant's DDGS is marketed through St. Paul-based Commodity Specialist Company (CSC). 
 	
 In terms of stack emissions from the plant's two gas-fired rotary drum dryers, the facility has already earned a place among the most environmentally sound ethanol plants in the world, largely due to the installation of a regenerative thermal oxidizer, which almost completely eliminates odor and atmospheric emissions while producing steam energy for the plant.
 
 Fagen/ICM project 
 Fagen, Inc. teamed with process-technology provider ICM, of Colwich, Kan., to design and build Glacial Lakes Energy. Fagen and ICM have worked jointly on many ethanol projects since the mid-1990s but never to the extent to which they collaborated in Watertown, said Dennis Vander Griend, ICM chief engineer. 
 	
 "I consider this project another first for ICM and Fagen," Vander Griend said. "We've entered into a new category of ethanol plant design with Glacial Lakes Energy."
 	
 Vander Griend was referring to multiple aspects of the plant's design engineering, process technology and construction, including a sophisticated drying system and regenerative thermal oxidizer, entirely designed and manufactured by ICM. 
 
 Confident in emissions compliance 
 Glacial Lakes Energy is one of several new ethanol plants incorporating a thermal oxidizer into the initial process-design of the plant. In the past, thermal oxidizers had been retrofitted to ethanol plants required to attain significant reductions in dryer stack emissions, often under increasingly stringent government standards.
 	
 "Glacial Lakes Energy has come online comfortably within compliance guidelines, rather than attempting to meet those standards at a later time. "With the system we have installed at Glacial Lakes Energy, there's really no chance of being out of compliance. We will meet (EPA) standards without question," Vander Griend told EPM. "With most ethanol projects coming online from this point forward, you'll see this."

 	
 In fact, Vander Griend said, other Fagen/ICM projects have already taken the same preemptive approach. Badger State Ethanol, a new 40 mmgy plant in Monroe, Wis., also incorporated a thermal oxidizer into its original design, as will Little Sioux Corn Processors, a plant under construction in Marcus, Iowa. Likewise, Northern Lights Ethanol, near Big Stone City, S.D., a Broin-built and managed facility, installed a thermal oxidizer before startup as well.
 
 The Business Structure
 Glacial Lakes Energy, LLC was formed in May of 2001 (see the timeline for a detailed look at the group's history) and is owned and operated by Glacial Lakes Corn Processors (GLCP) and Glacial Lakes Capital, LLC. GLCP is a South Dakota Cooperative comprised of 827 members who have invested in Glacial Lakes Energy, LLC. Each member is responsible for delivering a minimum of 5,000 bushels of corn to the plant each year. GLCP is governed by a board of 11 directors, five of which serve on the Glacial Lakes Energy board. 
 	
 Interestingly, GLC is an investment arm of VeraSun Energy, a privately held company planning to build a 100 mmgy ethanol plant near Brookings, S.D. The group is comprised of four investors, including VeraSun's own CEO Don Endres, who serves as vice chair of the Glacial Lakes Energy board. Currently, seven individuals who serve on the Glacial Lakes Energy board meet on a monthly basis.
 
 Why Watertown? 
 Glacial Lakes Energy General Manager Tom Branhan said Watertown, a city of just over 20,000, welcomed Glacial Lakes Energy with open arms. 
 	
 "Of course, there is always some of that ("not in my backyard") mentality, but overall we have received much more support than opposition," he said. "The people of this town overwhelmingly wanted us here." 
 	
 At no time has that support been more evident than at Glacial Lakes Energy's ribbon cutting and grand opening ceremonies in mid-August, when an estimated 2,000 people took a peek inside the facility.
 	

 "We're really here because of economics," said Glacial Lakes Energy President Randy Frederick. "Whether you are an investor in the plant or not, you'll benefit from this."
 	
 After raising $20-$25 million in funds needed to obtain debt financing on the $54 million project, Glacial Lakes Energy's future was solidified. GLCP offered a minimum of 5,000,000 shares and a maximum of 12,500,000 shares of "common stock" at a purchase price of $2.00 per share. Shares were on a first-come, first-served basis and were offered only to South Dakota residents.
 
 The site
 While building the plant near Watertown was agreed upon from the beginning, GLPC had to choose between two sites in 2001: one site was located a few miles outside of town; the other just beyond the city limits within the Hanten Industrial Park. GLPC chose the later site in June 2001, when city officials agreed to annex the industrial park into the city.
 	
 "Our relationship with the city of Watertown is beneficial," said Glacial Lakes Energy General Manager Tom Branhan. "We utilize the city's water, electricity and natural gas and have fire (and police) protection available should we ever need it."
 	
 By mid-July 2001, Fagen, Inc. had begun preparing the site for construction. An official ground-breaking ceremony was held a month later, attracting the likes of Sen. Tom Daschle (D-S.D.), Sen. Tim Johnson (D-S.D.), Representative John Thune (R-S.D.), and Watertown Mayor Brenda Barger. 
 	 
 As tanks and structural steel work gave way to electrical work and process piping, Fagen's workforce on site grew to 155 people at one point -and that's not including subcontractors working on-site at the same time. 
 	 
 "It gets intensely busy on site," said Aaron Fagen, who essentially lived in Watertown with his crew for a year. "We coordinate the complexity of the project by breaking down the work into manageable two-week schedules." 
 	 

 Fagen told EPM 17 subcontractors worked on the project. Many of of Fagen's skilled craft workers travel with the company from one ethanol project to another. Fagen, Inc. is able to independently handle civil, structural, mechanical and electrical services.
 
 Well-trained staffBy June 2002, Glacial Lakes Energy had a fully loaded staff of 34. The plant's operating team underwent extensive training at U.S. Energy, an ICM plant in Russell, Kan., used as a training center. The crew trained in Russell for two weeks before receiving on-site training in Watertown for an additional four weeks. 
 	
 Over 90 percent of the plant's employees are area residents, Branhan said. In total, the facility employs 16 operators, five managers, seven grains handling personnel and six administrative personnel (See plant managers and administrative personnel at right) that keep the facility running at full-capacity 24 hours a day, 365 days a year. 
 	
 "We get by with slightly fewer employees than other plants this size because of the design," Branhan said. "It's a major cost savings built right into the package."

Environmentally friendly design eliminates emissions concerns for Watertown, S.D. producer

Glacial Lakes Energy, LLC off to a clean start

U.S. Department of Energy Secretary Spencer Abraham highlighted the Bush Administration's energy policy and advances in renewable energy while visiting South Dakota Oct. 21.
 	
 The Renewable Energy Roundtable, held in Sioux Falls, S.D., brought together Secretary Abraham, Congressman John Thune (R-S.D.), local representatives from the biofuels and ethanol industry, state corn growers association, state rural electrical association, wind energy companies and alternative energy advocates to discuss biofuels, wind energy, solar energy and electricity generation.
 	
 "President Bush and I are convinced that renewable energies must play a large role in meeting our challenging future energy needs and reducing our dependence on foreign oil," Secretary Abraham said. "For every improvement in renewable energy technology we develop, for every new megawatt of electricity or gallon of alternative fuel that is produced, we make our nation a little more secure."
 	
 Abraham specifically acknowledged the recent $5.2 million award to Broin & Associates, Inc. Broin will contribute $5.9 million to the joint research and development project between the company and the U.S. Department of Energy. Broin's biorefinery in Scotland, S.D., will house the pilot project.
 	
 "Broin will work in partnership with the Department of Energy to develop and perfect a dry mill biorefinery process with the aim of enhancing the economics of existing ethanol dry mills," Secretary Abraham said. "The end result is not just increased ethanol yields but more competitive bioproducts such as plastics, paints and adhesives that are today made from petroleum. This can result in more markets for agricultural products, more profits for farmers and enhanced energy security for America."

 
 President Bush noted the need to increase the production of biomass energy in his National Energy Policy. Organic matter such as plants and wood that can provide heat, make fuel and generate electricity is categorized as biomass.

Energy Secretary Abraham hosts renewable roundtable in S.D.

WASHINGTON, D.C. – The Renewable Fuels Association (RFA) has announced the election of its board of directors' officers for the 2003 fiscal year beginning this October at the RFA annual meeting held in Washington, D.C. The FY 2003 officers are: Chairman Gary Smith, High Plains Corporation; Vice Chairman Ron Miller, Williams Bio-Energy; Treasurer Bill Lee, Chippewa Valley Ethanol Co. (CVEC); Secretary Jeff Broin, Broin Companies; President Bob Dinneen, RFA.
 	
 By a unanimous vote Smith, Miller, Broin and Dinneen were re-elected and Lee was newly elected. All officers serve a one-year term.
 	
 "The RFA board did a great job last year setting forth an agenda of more growth, more communication and more cooperation for the association," said Bob Dinneen, RFA president. "We've seen the results. These officers and the entire RFA board reflect the growth of our industry, especially by farmer-owned facilities. And we forged new alliances with our oil industry partners. This alliance will be good for the ethanol industry, good for the oil industry and good for consumers."

RFA elects officers at annual meeting

The ethanol industry's decision to label distillers grains - in its various forms - a "coproduct" of ethanol production, rather than a "byproduct" of ethanol production, draws a clear reference to its heightened economic importance. The distinction says, "Marketing this pro-duct successfully is necessary to the success of our industry."
 	
 And for good reason.
 	
 Domestic and foreign sales of distillers grains account for approximately 15 to 20 percent of all U.S. ethanol dry-mill revenue. Today's ethanol plants are utilizing advanced fermentation technologies and improved quality control procedures to produce a higher quality distillers grains. By most accounts, distillers grains is the fastest growing livestock feed in the nation today, with expanding beef and dairy cattle applications and increasingly successful applications in the swine and poultry industries. According to feed reports, distillers grains has been experiencing an annual growth rate of six to eight percent in the cattle industry alone. 
 	
 As 2003 approaches, U.S. distillers grains from ethanol production will approach 4 million tons per year, double the amount produced five years ago. If the ethanol industry reaches a production capacity of 5 billion gallons per year by 2012, distillers grains production will approach 10 million tons per year. 
 	
 Of the 3.85 million tons produced currently, about 700,000 tons are exported to countries in the European Union for use in livestock feeds. A small amount of DDGS is exported to Mexico, leaving about 2.8 million tons available for domestic use in the U.S. and Canada. 
 	
 In it's multiple forms, distillers grains is being marketed as a "high-protein, high-energy" animal feed supplement. Nutritionists say distillers grains contains by-pass proteins believed to be superior to other protein supplements such as cottonseed meal and soybean meal.

 	
 In North America, over 80 percent of all marketed distillers grains is used in ruminant diets. Currently, Minnesota is the only state in the U.S. where a significant amount of DDGS is fed to turkeys. Historically, less than one percent of the total annual production is fed to swine, but based upon recent research studies conducted at the University of Minnesota showing excellent nutritional value of DDGS in swine diets, its use is increasing in the pork industry (see ‘Swine & Poultry' section on page 18).
 
 Three forms
 Dry-mill ethanol plants create three forms of distillers grains: Distillers Wet Grains (DWG), Distillers Modified Wet Grains (DMWG) and Distillers Dried Grains with Solubles (DDGS), when solubles - fine soluble fiber, fat glycerol, etc. that have been concentrated by the evaporators and incorporated into the distillers grains before drying - are added to the feed. All three forms are frequently referred to as "distillers." 
 	
 DWG contains approximately 62 to 70 percent moisture. DWG has a shelf life of three days to two weeks and can be sold to farms within the general vicinity of an ethanol plant. 
 	
 DMWG is DWG that has been dried to approximately 50 percent moisture. DMWG has a slightly longer shelf life of approximately three weeks and is often sold to nearby markets. DDGS is dried to 10 to 12 percent moisture, has an almost infinite shelf life and may be sold and shipped to any market regardless of its vicinity to an ethanol plant. For obvious reasons, DDGS is easier to handle, transport and store than modified and wet distillers grains. 
 	
 Because of the increased demand for ethanol, the production of disitillers grains is expected to double within the next few years, further increasing the quantity available for use in livestock feeds. Despite concerns, industry analysts say the price of distilers grains has remained relatively constant over the last 10 years. The mid-September selling price was $80 to $126 per ton, a wide range in market value representing the difference between the Midwest and the West Coast - a price disparity due largely to transportation costs. 
 	
 "With this huge increase in ethanol production, everyone has been waiting for the price of DDGS to go way down," said Charlie Staff, executive director of the Distillers Grains technology Council. "but it's not going down because it is simply a great product with a unique composition. It is, in fact, an exceptional feed."
 	
 In addition to swine and poultry applications, dairy and beef cattle production alone holds vast markets that distillers grains has yet to penetrate. Producers are discovering ample opportunity for DDGS marketing on the West Coast, where dairy and beef operators are increasingly using distillers in feeds. California and other West Coast states are experiencing a dramatic increase in dairy production and offer considerable opportunities because the cattle in that region are raised primarily in feedlots. 		Texas, New Mexico and other Southwestern states (largely beef cattle producers) present another huge market opportunity that is yet to be explored. 

 
 Swine & Poultry 
 Incorporating distillers grains into the swine and poultry industries is proving more challenging than the cattle industry. Nevertheless, extensive research into incorporating distillers grains into the swine diet is being conducted by University of Minnesota nutritionist Dr. Jerry Shurson, who has probably done more than any other researcher to advance the usage of DDGS in non-ruminant diets. 
 	
 Pigs have not always been fed DDGS, but improved fermentation technology and better dryers in today's new generation ethanol plants are producing a superior product, better suited for swine, according to Shurson.
 	
 From one experiment to another over the last five years, Shurson became convinced that the ethanol industry's improved version of DDGS fits very well in swine diets. He is now reportedly researching the value-added properties that appear unique to DDGS. His studies show that DDGS may have a positive impact on ileitis-challenged pigs when fed in combination with antibiotics. The research is an attempt to show that pigs suffering from gut health problems improve or maintain performance levels when DDGS is in the diet.
 
 Phosphorus advantage 
 As reported in National Hog Farmer in August, as the industry moves toward applying manure based on a phosphorus standard rather than nitrogen, the value of ingredients like DDGS for swine will become much greater.
 	
 Fermentation liberates the phytate phosphorus in corn, which makes phosphorus more available to the pig, the report said. At a typical 10 percent inclusion rate for grow-finish, 200 lb. of DDGS, plus 3 lb. of limestone, will replace 177 lb. of corn, 20 lb. of soybean meal and 6 lb. of dicalcium phosphate in a grow-finish diet.
 	
 DDGS is suitable for sows as well, according to studies. Gestating animals can receive up to 40 percent DDGS and lactating sows up to 20 percent in the diet.

 	
 Producers new to DDGS often feed a conservative five percent diet, which won't provide much impact for reducing inorganic phosphorus or reducing excreted phosphorus, according to Shurson, who has said the 10 percent level makes more sense in terms of reducing phosphorus.
 
 Quality issues 
 The research of John Goihl, of Agri-Nutrition Services, points out that there can be quality variations in the processing of DDGS, so it's best to buy from a "consistent source." The University of Illinois is doing a large sampling of plants to identify variations due to processing. Goihl has identified the following determining factors of variation in DDGS size, particle size and bulk density: nutrient digestibility, mixing efficiency, amount of ingredient segregation during transport and handling, pellet quality, bulk density, palatability, sorting of meal or mash diets and incidence of gastric ulcers. 
 
 Swine market picking upAccording to Steve Markham, senior trader with Commodity Specialists Co., the amount of DDGS fed to pigs has risen from 33,000 tons annually a few years ago to nearly 90,000 tons today. CSC markets DDGS to a hog operation in Minnesota that buys in excess of 800 tons per week, Markham said, adding that he believes more hog farmers will follow suit.

As 2003 approaches, U.S. distillers grains from ethanol production will approach four million tons per year, double the amount produced five years ago

Producers & marketers find innovative uses for ethanol's improved coproduct

According to a recent EPM survey of several U.S. dry-mill ethanol plants, a growing number of producers are selling over 25 percent of their distillers grains in the wet form, side-stepping the drying process altogether. 
 	
 Certainly, a principle reason to limit distillers grains drying is energy costs, producers say, but many plants are also avoiding the use of dryers to avoid emissions and odor concerns in the wake of recent negotiations between several ethanol plants and the Environmental Pollution Control Agency's Region 5, which is having wide-sweeping effects on the industry. Facilities that produce between 20 and 40 mmgy - and those without thermal oxidizers - seem particularly inclined to seek out new markets for wet and modified distillers grains. 
 	
 Depending on the season, producers such as Chippewa Valley Ethanol Co., Denco, Golden Triangle, Heartland Grain Fuels, Tri-State Ethanol and others are producing over 40 percent of their distillers in the wet or modified form, while High Plains Corporation's Colwich, Kan. plant is producing as much as 90 percent wet. Others, such as Quad County Corn Processors and Siouxland Energy & Livestock are avoiding the drying process all together. 
 	
 To get a handle on this trend, EPM spoke with Tri-State Ethanol General Manager Randy Kramer, who said his plant went from producing 25 percent of its distillers wet to 50 percent wet in the month of October alone. 

 	
 "The primary reason for our increase in wet distillers production is seasonal demand," Kramer said. "Our local customers are trying to fatten cattle up and we've seen a higher demand in the last two weeks specifically."
 	
 Although most producers recommend a transportation limit of 40 to 50 miles on WDG, Kramer said he has had customers take it much further than that. 
 	
 "It really depends on temperature," he said. "We've had a very cold October and so it doesn't have to be moved quite as fast."
 	
 Tri-State is now using its dryer on a half-time basis, running the dryer in the day and producing WDG at night, Kramer said. It should be noted that some ethanol plants have the ability to route a percentage of distillers grains to the drying system while producing wet product at the same time. Tri-State Ethanol does not have that ability.
 	
 Steve Markham, senior commodities trader with Commodities Specialists Company (CSC), told EPM several of the plants CSC represents are marketing a significant portion of their distillers grains wet, depending on the plant's ability to sell the product in the area. 
 	
 "Winnebago (Corn Plus) and Benson (CVEC) are doing a good job of it," Markham said. "The number of plants marketing wet product will grow." 
 	
 Why is it happening? Markham and others say most producers are simply adjusting the spread between wet and dry distillers production depending on drying costs, which is dependent on natural gas costs.
 	
 But there are other factors as well. 
 	

 "Emissions and economics are only part of it," Markham explained. "Ethanol producers are also becoming more responsive to local needs."
 	
 Markham also said interest in WDG has simply grown as well. "Last year, there were drought issues and Nebraska producers were selling 80 percent of their disitllers wet," he said. "With all the new plants in South Dakota, wet might be an option there as well." 
 	
 In fact, Markham said any plant not marketing WDG today is probably just waiting to get into the wet game. "The customer base for it develops over time," he said. 
 
 Nutritional comparisons 
 According to most nutritionists and marketers, DDGS and WDG have similar nutrient content on a dry-matter basis, with WDG possibly having a slight performance advantage. 
 	
 Typically, wet will slightly beat out dry in feed trials. The difference, most say, comes from the dryer binding up protein. In addition, palatability and feed intake may also be slightly better with WDG. n

Wet distillers grains has advantages beyond economics

More producers choosing to sell WDG

Bio-Renewable Group (BRG), a design-build team of Wanzek Construction, Suitt Construction and CJS Engineering, with Vogelbusch U.S.A. providing the process technology, reported to EPM recently that the group is in negotiations with a number of potential future producers in the Midwest who are looking at various sizes of ethanol plants. Construction on at least one of the projects could begin as early next spring. "With the demand of ethanol production at an all-time high, BRG is poised to be a force in the design-build arena of ethanol plant construction," a company spokesperson said.

Bio-Renewable Group active with ethanol projects

Iowa ethanol and bioenergy projects will receive $2,174,500 as part of Value-Added Agricultural Product Market Development grants in 22 states, totaling over $7.2 million, Agriculture Secretary Ann Veneman announced last month.
 	
 The grants will foster the development of alternative energy sources while spurring economic growth and job creation in rural communities. The alternative energy grants are a portion of the Value-Added Agricultural Product Market Development grants totaling more than $37 million in 43 states announced separately last month.
 	 
 Some of the grant funds will be used to develop ethanol facilities in Iowa. The Big River Resources Cooperative in Mediapolis will use its $500,000 grant to assist in the start-up of a 40 mmgy ethanol plant. In Holstein, a $75,000 grant to the Galva Holstein Ag, LLC will help determine the feasibility of using dried distillers grain as the basis for an environmentally friendly fertilizer. Dried distillers grain is a coproduct created in the process of making ethanol.
 	

 "These projects will bring new opportunities for developing alternative energy sources as well as create other value-added agricultural products that provide real investment in our rural communities," said Veneman. 
 	
 These grants fund projects in several states, including Illinois, Iowa, South Dakota and Wisconsin, to develop 40 mmgy ethanol facilities. Over $5 million dollars in grant funds were awarded to 22 proposed ethanol ventures in 14 states. 
 	
 "The tremendous volume and quality of applications is a testament to the innovation and vision existing in rural America for improving our rural communities," said Under Secretary for Rural Development Tom Dorr. "These grants will provide important investments in the area of energy where the agricultural sector continues to be a leader in forging new solutions."

Economic assistance will foster the development of alternative energy sources, spur economic growth and job creation in rural communities

Ethanol and bioenergy grants announced

Intrepid Technology & Resources, Inc. announced this month the creation of the Idaho Ethanol Development Group. The company says this group of leaders will forge the framework necessary to launch a new ethanol industry in Idaho. 
 	
 Although Idaho is closer to future western markets, it does not have the incentives or research base utilized by Midwest producers. Intrepid, an alternative energy and natural resources development firm, will act upon the recommendations of the group to finalize plant locations, feedstock selections, and identify research related to future ethanol approaches. 
 	
 Members of the group formed by Intrepid include Idaho's speaker of the state House of Representatives, Idaho Senate president, University of Idaho's vice president for research, executive director of the Idaho Grain Producers Association, director of the Idaho Department of Commerce, deputy laboratory director of the Idaho National Engineering and Environmental Laboratory, a partner for Highway 12 Venture Capital Fund and director of the Idaho Department of Agriculture. ITR is an alternative energy development and operating company organized into two Groups: Services, which includes the Engineering, Specialty and Virtual Science Services Divisions; and Operations, which includes the Alternative Energy and the Renewable Energy & Resources Divisions

Intrepid Technology creates Idaho Ethanol Development Group

Lubrizol Foam Control Additives, a business unit of the Lubrizol Corporation, has launched a redesigned website that provides easier access to information about the company's defoamer and antifoam products. The new site provides in-depth information on Lubrizol Foam Control Additives products and capabilities. The company has established a "global capability" in foam control technology with the acquisition of Ross Chem Inc., KABO Chemicals and Becker Chemie. Foam Control Additives specializes in defoamers and antifoams for several industries, including ethanol production.

Lubrizol launches website for foam control additives

A group of investors from Chicago and Wisconsin are looking into constructing the first of its kind ethanol-fired power plant in Browkaw, Wis.
 The group is currently seeking investors and performing interconnection and transmission service studies to see if it is feasible to connect the plant to the American Transmission Company's high-voltage transmission grid. A 20 mmgy ethanol plant would be built at the site. A natural gas pipeline would also be used to provide a secondary fuel for the plant. Early estimates on the costs of such a project are in the $120 million range.

Ethanol power plant proposed in Wisconsin

The only northwest Ohio ethanol project that appeared to be active returned all of the money it collected to investors in mid-October, ending hopes of taking advantage of a state tax credit signed into law in March. Northwest Ethanol, LLC returned 1.7 million to 140 investors. That was 14 percent of the $12 million that the group needed to collect to go forward with the project. However, someone very close to the project said the plant will eventually be built - possibly even larger than previously planned.

Ohio ethanol project returns money to investors

A recent marketing study has provided further evidence supporting a south-central Pennsylvania ethanol plant. The Regional Economic Development District Initiative and BBI International conducted the study to verify that sufficient markets within the mid-Atlantic region exist to sustain plant products. The marketing study showed the proposed $40 million plant could generate a profit while supplying ethanol, distillers grains and carbon dioxide to a customer base that would stretch from Washington, D.C., to Boston. The marketing study examined the Northeast region's average gasoline consumption in relation to how demand would be affected if one percent of the gasoline was replaced with ethanol. Working with data supplied by the Senate Renewable Fuel Standards, the study found the demand for ethanol in the Northeast region could increase to 545 million gallons by 2006.

Study fuels project in south-central Pennsylvania

Oklahoma Farmers Union Sustainable Energy, LLC and projects in 21 other states will receive grants through the USDA Rural Development office, officials announced Tuesday. The Oklahoma group plans to use its $231,000 to determine the feasibility of using Oklahoma grain for the production of ethanol.

Oklahoma project receives grant from USDA

North Dakota lawmakers are trying to figure out how to increase demand for ethanol. One proposal is to require all North Dakota service stations to sell ethanol blended fuel. The Legislature's interim Agriculture Committee considered the idea last month. But a spokeswoman for the North Dakota Corn Growers Association said the mandate isn't necessary.
 
 Jocie Iszler said ethanol demand has almost doubled in North Dakota in recent years. She said the market share has risen from 14 percent to 26 percent. Iszler also said advertising and increased awareness of the benefits of ethanol fuels have increased demand. North Dakota has two ethanol plants in Grafton and Walhalla, and Iszler says corn growers are trying to drum up support for building another one.

North Dakota lawmakers want more ethanol

A new study released by the National Corn Growers Association (NCGA) showed that increasing demand for renewable fuels like ethanol and biodiesel would boost agriculture economy and save taxpayer money. Using the 2002 Farm Bill as the baseline, the study projected the impacts of enacting a five billion gallon RFS as was passed by the Senate. The study, conducted by nationally renowned agriculture economist John Urbanchuk, found: "An increase in the demand for renewable fuels of the magnitude [called for in the energy bill] would have significant positive implications for energy security, the agricultural sector, and the economy." According to the findings, enacting a 5 billion gallon RFS would: Increase corn prices by 6.8 percent over baseline levels, increase soybean prices by 4.4 percent above baseline levels, boost net farm cash income by nearly $51 billion over the baseline through 2012 and reduce direct government payments to farmers by $5.9 billion through 2012. "An RFS would considerably raise farm income, as well as boost economies in rural America," said NCGA president Tim Hume. "In turn, the U.S. government could reduce spending on agriculture programs and save taxpayers nearly six percent in monetary assistance for direct government payments to farmers."

Study shows RFS would reduce farm payments

Fifty current and future ethanol producers from 16 states sent a letter to the chairmen of the House and Senate tax writing committees urging them to include a correction to the small ethanol producer credit in the final version of pending energy legislation. The group, spearheaded by the Renewable Fuels Association, is working to allow farmer-owned ethanol plants that organize as cooperatives access to the program.  As currently implemented, farmer cooperatives cannot take the credit. The ethanol producers wrote:  "Under current law, small ethanol producers are allowed a 10-cents per gallon production income tax credit on up to 15 million gallons of production annually.  The provision is generally available to all small ethanol producers except those organized as farmer cooperatives.  Due to their structure, farmer cooperatives are not able to take the credit.

Ethanol producers plead for small producer credit tax correction in legislation

Even as Congress recessed until after the November elections, the coalition supporting the comprehensive fuels agreement vowed to continue pushing the legislation as part of a comprehensive energy bill. Congress passed a continuing resolution to fund government operations through Nov. 22. Prior to then, Congress must reconvene to pass either the necessary appropriations bills or another continuing resolution. At that time, Congress is likely to also work on other outstanding legislation, including the energy bill.
 	
 "While we are disappointed Congress failed to act now to address our country's many pressing energy needs, we will not give up the fight to secure ultimate passage of the carefully crafted fuels agreement," said Bob Dinneen, Renewable Fuels Association president. "The reasons to pass the fuels agreement – preventing more MTBE water contamination, strengthening clean air regulations, providing refinery flexibility, enhancing U.S. energy security, and boosting rural economic development – will not go away just because Congress has gone home without passing an energy bill. They will only intensify. We certainly believe Congress should, can and will move this legislation yet this year."
 	

 The fuels agreement sprang from a historic coalition of environmental and public health groups, state officials, oil refiners, farm organizations, and renewable fuel producers. The agreement calls for a federal ban on MTBE, elimination of the oxygenate requirement for reformulated gasoline, enhanced clean air protections, and establishing a renewable fuels standard (RFS). The RFS would require 2.3 billion gallons of renewable fuels, like ethanol and biodiesel, be used nationally in 2004, increasing gradually to 5 billion gallons in 2012.
 	
 "It's a shame Congress could not complete its work in a timely fashion," added Dinneen.

Coalition vows to continue pushing legislation

RFA disappointed Congress recessed without energy bill, renewable fuels standard

After 20 years as a marketer and trader of agricultural commodities, Steve Markham, of Commodity Specialist Company (CSC), has simplified his professional advice to five words: "Work hard and be honest." 
 	
 It's a down-to-earth statement that characterizes the reputation Markham, and others at CSC, have earned among ethanol producers who rely on distillers grains sales for up to 20 percent of their total revenue. 
 Following his own words of advice, Markham, 43, has helped CSC become one of the nation's most recognized marketers of distillers grains, a coproduct of the ethanol dry-milling process. The Minneapolis-based company has a projected goal of marketing over one million tons of distillers grains in 2003, more than any other U.S. company, and Markham's presence in the ethanol industry has helped drive that success. 
 
 Farm background
 Markham has been close to agriculture his entire life. The 6'6" tall commodities marketer was raised on a farm near Whitewater, Wis., where his family raised dairy cattle, hogs and crops. He began trading with Pillsbury Co. in 1981 after earning degrees in ag business and economics from South Dakota State University, in Brookings, S.D. 
 Starting as a junior trader, Markham learned the basics of commodities trading during several weeks of training in Minneapolis and Chicago before being assigned to a senior trader in Kansas City, Mo., where he traded mill-feed (a byproduct of flour milling) for three years. "Working in Kansas City at that time was a great place to be as a young trader," Markham recalled. "We had a good crew in that office. We were all eager and aggressive and learning the business at the same time. I really enjoyed my time there."
 
 Back to Minnesota
 By the mid-1980s, Markham had been transferred to St. Paul, where he began trading corn gluten feed and corn gluten meal from the U.S. ethanol and corn sweetener industries. 
 	 

 "That was essentially the beginning of the work I do today," Markham said. "Although I largely trade distillers grains now (rather than the corn wet-milling products), the basic principles apply to all commodities trading. . . margins, supply and demand, emotion, spreading and arbitrage, and freight.
 	
 In 1989, Pillsbury's feed ingredients division was acquired by Grand Metropolitan. The division was split up and sold off into separate parts, much of it going to ConAgra and Archer Daniels Midland (ADM), while Grand Metropolitan held on to the commodities trading division Markham belonged to until 1993. That year, seven investors, including Markham, took part in an employee-management buyout. CSC was created, and to this day, the company still allows its employees to invest in the business. 
 	
 CSC has 125 employees worldwide and does about $1 billion in sales every year. The company is a world leader in domestic and export markets for both food and feed commodities. On the feed side, CSC is one of the world's largest traders of distillers grains, soybean meal, cottonseed meal, hominy, wheat mids, brewers grains, edible beans and other feeds. 
 	
 Markham works directly with two other traders-Jim Montbriand and Sean Broderick- who market distillers grains almost entirely, along with a support staff of six.
 	
 Markham said his office today specializes in marketing distillers grains (both wet and dry) because the ethanol wet-milling market became largely consolidated over the last two decades, while the number of DDG suppliers has grown substantially.
 	
 "In my work, the opposite of consolidation is to my advantage," Markham explained. 
 	
 Distillers grains trading is no job for those who don't like to talk. When Markham is not on the road promoting distillers grains, speaking at seminars or meeting with customers, he's busy on the phone.
 	 
 "Some days I'll have a hundred calls in eight hours," he said. "My day can include sales, purchases, inventory control, freight negotiations, management of the rail car fleet, and most importantly, market development.
 	 
 "I have been in the same job for many years, but It's still very exciting because the business is constantly changing and growing," he said. "The market has changed, the product has changed, and I learn something new every day."

 	
 The future of distillers grains
 As expected, Markham has a lot to say about distillers grains marketing and its relation to ethanol production. He said he believes the future of the market could not be brighter. 
 	
 "Despite concerns some people have, we believe the distillers grains market will steadily grow at a predictable pace in the years ahead," he said. "Our growth will be methodical, yet rapid."
 	
 But will the growth be rapid enough to keep pace with an ethanol industry expansion fueled by a renewable fuels standard? 
 	
 "Without question. No problem," Markham responded. "The feed industry is interested in the least-cost ration within the nutritional parameters (of the livestock they are growing). If distillers is competitively priced with other feeds, we'll have no problem growing and developing the market. Price solves everything, and we won't have to cut our prices in half to do it."
 	
 As an example of the massive feed markets that distillers grains have yet to penetrate, Markham described the results of a poll he took of 21 dairy farmers in California a while back. When he asked the farmers how much distillers grains they used at $116 per ton, the average response was 3.2 pounds per cow, per day. When he asked the same farmers how much distillers they would use if the price was $110 per ton (a 5 percent price drop), they said six pounds per cow, per day (on average).
 	
 "And that's just one of many examples," Markham explained. "The lesson is that DDG is price elastic - and it doesn't take much of a change to get a response from our customers. So, you ask if I am worried about the future of distillers grains marketing. . . Not a chance."
 	
 Markham also pointed to the forward-thinking research that is taking place at several Midwest universities, including the University of Minnesota, where Dr. Jerry Shurson and his colleagues are conducting monogastric (non-ruminant) feed research that is changing the way poultry and swine farmers look at - and buy - distillers grains. For example, he said, CSC markets feed to a hog operation in Minnesota that buys in excess of 700 tons of distillers grains per week, Markham said, adding that more hog farmers are following suit. 
 	

 "The truth is," Markham said. "Our industry is so far from saturating the market that it is unbelievable. The possibilities are staggering."

Markham started with Pillsbury after college in 1981, now leads disitllers grains marketing powerhouse in Minneapolis

CSC's Steve Markham has 21 years in commodities trading and marketing

SweetPro Premium Feed Supplements, headquarterd in Walhalla, N.D., is a leader among U.S. feed manufacturers in finding new and innovative uses for distillers grains from ethanol production.
 
 Since 1991, SweetPro has been using distillers grains as the principle ingredient in several of its patented cattle feed products, including lick barrels and bagged feed products. Most of the company's products contain 30 to 50 percent DDGS and condensed solubles. 
 	
 Today, the company has manufacturing plants in North Dakota and Kansas, which rely heavily on nearby ethanol plants for DDGS and condensed solubles used in its feed products. In North Dakota, SweetPro buys DDGS and condensed solubles from Archer Daniels Midland (ADM) in Walhalla, Alchem, LLP in Grafton, N.D. and Chippewa Valley Ethanol Company (CVEC), in Benson, Minn. In Kansas, SweetPro buys largely from MGP Ingredients (formerly Midwest Grain Products) in Atchison, Kan., and lessor amounts from other ethanol plants in the area. 
 	
 "Our business revolves around distillers grains," SweetPro President Bob Thornberg told EPM. "That's why we're in this business. That's how it all got started."
 	
 Thornberg, formerly the general manager of the Walhalla ethanol plant under the ownership of Dawn Enterprises, recognized the value of DDGS as a feed product and founded SweetPro to fill a gap in the market. The result, he said, was the development of a broad line of feed products rich in yeast and enzymes that boost beef and dairy farmer profits through improved feed efficiencies, labor savings and better animal health. 
 	
 The company manufactures 10 variations of lick barrels in both returnable and non-returnable containers and two different bagged products, which are slightly different than the barreled products and have greater "flowability." One of the bagged products contains SweetPro's own proprietary "fermented feed product." 
 	
 "Over the years, " he said. "we have broadened our line to address additional species."
 	
 While beef cattle producers make up the bulk of SweetPro's sales, the company's feed lines are also popular with producers of dairy cattle, calves, sheep and horses. The company is exploring feed products for the swine market currently. SweetPro has customers throughout North America, in 25 states and four Canadian provinces, Thornberg said. 
 According to the company's website, www.sweetpro.com, SweetPro's patented products are "higher in protein and fat than molasses lick blocks." Here are some additional website statements about the company's products: 
 

 1. SweetPro blocks use condensed distillers solubles with much higher protein and nearly 10 times the fat as molasses, plus improved aroma and palatability. 
 
 2. Improved overall digestion and feed efficiency of 30 percent or more is achieved from SweetPro's fermentation feed ingredients, rich in yeasts, enzymes and volatile organic acids that improve rumen fermentation. 
 
 3. Energy in SweetPro blocks comes from complex carbohydrates instead of the simple sugars of molasses, for less digestive disruption.
 
 4. The safe, protein sources of SweetPro blocks include high rumen by-pass ingredients to give calves and cattle an extra boost. 
 
 5. SweetPro blocks are fortified with Vitamins A, D and E, and a balanced blend of chelated trace minerals, to supplement lower quality hay, straw and stover.
 	
 "We work with nutritionists and the products have been refined over the years based on experiences and feedback from producers," Thornberg said. "Producer feedback is extremely valuable to us."
 	
 The growth of the ethanol industry itself, Thornberg said, has also contributed to the stability and success of SweetPro. 
 	
 "For us, supply availability (of DDGS) is not an issue like it used to be," he said. "Today, we have a stable and consistent supply of DDGS. The ethanol industry is very solid. Likewise, we believe we bring a lot to the table in terms of adding more value to the ethanol production by utilizing DDGS."

Since 1991, SweetPro has been using DDGS as the principle ingredient in several of its patented cattle feed products, including lick barrels and bagged feed products

SweetPro packages distillers grains in in unique way

Golden Grain Energy: This group has selected Fagen, Inc. as the contractor for 40-mmgy plant to be located near Mason City, Iowa. The plant is expected to be in production by April 2004. They are now beginning work on rezoning the site and will be assembling a team to finalize all of the applications for the various incentive programs. They hope to start site grading in November. 

 
 Cornhusker Energy: Seeking permitting for a 40 mmgy plant near Lexington, Neb. The group signed a contract with Vogelbusch U.S.A., Inc. to provide process design for a 40 mmgy plant.
 
 Dakota Renewable Fuels, LLC: This N.D. group has signed Lurgi PSI, but they have yet to choose a site for this 30-mmgy plant. The group held investor interest meetings in Jamestown, Valley City, Wahpeton, Oakes, Lakota and Fargo, N.D. They will be holding more meetings around N.D. this winter. Thus far, the group has received $167,500 from the USDA Value-Added Grants to complete a business plan, complete offering documents, conduct equity drive and complete other activities. They also received $75,000 from the North Dakota Corn Utilization Council for start-up costs associated with getting a third ethanol plant operating in North Dakota.
 
 East Central Ag Products (ECAP): This group closed it's membership drive in early August for a plant to be built in Audrain County, Mo. ECAP has chosen Shiel Sexton to provide engineering services and Katzen International for process design. Billing Mechanical will provide piping service and Gaylor (not associated with the ethanol design-build firm) will provide electrical work. They still need to raise $9.5 million in equity from outside investors. If that happens, they hope to break ground in the spring of 2003 on a 30-mmgy plant in Laddonia, Mo. They will use corn and Milo as feedstocks.
 
 Prime Technologies: This group had expected to break ground in Pierre, S.D. after securing permitting, but the cooperative suspended operations last month. They still own the technology and still hold permits. They are going to "regroup and try again" in the spring. USDA is not releasing a $3 million Value-Added Grant because PRIME can't get a loan guarantee. CoBank is asking that the government guarantee up to $10 million in losses. USDA will not guarantee the loan. As a result, Co-Bank will not sign off on the loan and the USDA will not release a $3 million grant until the loan is covered. If funding is not secured by Oct. 16, state law requires the sponsors to start over, according to Pat Tracy, general manager of PRIME Technologies.
 
 Mid-Missouri Energy: This project is in the early stages of development in west-central Missouri. They were examining sites and legal structures in October. However, they have hired Fagen, Inc./ ICM as the design-build team. Hope to have site selection narrowed within the month. Farmers would like to begin equity drive this winter. Christiansen & Associates has been hired for business plan development

 
 Oregon Trail Ethanol: This group is looking for a site. They have signed agreements with Lurgi PSI, using an ICM process design for construction of a 40 mmgy production facility. Construction is projected to begin in the first quarter of 2003 and to take 12 months to complete. A feasibility study will look at a nine county area including: Nuckolls, Thayer, Jefferson, Clay, Fillmore and Saline in Nebraska, and Jewell, Republic and Washington in Kansas for possible sites. the group received $75,000 in funding through the Nebraska Agriculture Opportunities and Value-Added Partnership Act for the development of a feasibility study and a capitalization plan for a producer-owned ethanol plant
 
 Crossroads Cooperative: At last report, this group was looking at a site near Gering, Neb. 
 
 United Wisconsin Grain Producers: This group of grain farmers from Beaver Dam, Wis. is looking at a site in Columbia County. A joint Plan Commission and Village Board voted recently to visit the Monroe, Wis. ethanol plant (Badger State Ethanol, LLC) on a fact-finding mission by Nov. 15, before deciding whether to grant a conditional use permit for a similar plant.
 
 Nordic Biofuels: This group is currently in talks with the community of Ravenna, Neb. They would like to build a 100 mmgy ethanol plant by 2004. The city of Ravenna has successfully annexed land parcels to be used to build the plant. Nordic Biofuels also recently announced plans to build an 84 mmgy to be located in Longview, Wash.
 
 Western Plains Energy, LLC: Now in the process of selling shares and raising capital for a 30 mmgy plant in western Kansas near the town of Campus. ICM will design the plant. At last report, this group was approaching the halfway point in their equity drive and had extended the equity offering period to December 31, 2002 for a 30 mmgy plant to be built near Oakley, Kan. 
 
 Mississippi Ethanol, LLC: This project is starting to organize investors for a project that proposes to use sawdust as a feedstock for ethanol.

 
 Garden State Ethanol: Gov. McGreevey of New Jersey announced last month that the state will help build a 40 mmgy ethanol plant for this group to be located at an undetermined site in southern New Jersey. n

Several groups nearing construction phases, others just beginning to organize

Future producers diligently plan industry expansion

Plagued by many of the same issues that haunt the U.S. sugar industry, such as shrinking markets, low world sugar prices and increased competition from corn sweeteners, the German beet sugar industry is eying ethanol. In mid-October, a group of 19 representatives from Germany, many of which were sugar producers, toured three ethanol facilities in Kansas and Nebraska.
 	
 BBI International organized the whirlwind bus tour of the U.S. Energy Partners in Russell, Kan., Chief Ethanol in Hastings, Neb., and High Plains Ethanol in York, Neb. Gunter Brodl of Vogelbusch U.S.A. hosted a dinner for the group in Hastings. The tour ended with a visit to the National Renewable Energy Laboratory in Golden, Colo., to discuss the progress of the cellulose-to-ethanol technology.
 	
 Currently there is no ethanol production in Germany, but the government is strongly encouraging the development of domestic ethanol production. "Sugar and sugar co- products are a natural feedstock for ethanol production," said Klaus Dunker of NORDZUCKER, a major beet sugar producer in Germany. Molasses, the residue sugars in the beet pulp after processing and perhaps even the sugar itself, all are potential feedstocks for ethanol production.
 	
 Currently, the beet pulp is dried and sold as livestock feed. Molasses is sometimes further refined and sold as a consumer product or mixed with the beet pulp as a feed ingredient, depending on demand. The equipment required to extract the residual sugars left in the beet pulp are simply too expensive to pass a cost/benefit test. Extracting those sugars in an ethanol facility may be significantly more cost effective and still leave the value of the beet pulp as a co-product in tact.
 	
 In a worst-case scenario, beet sugar producers could actually use sugar itself as a feedstock, providing the economics could justify such a departure from traditional uses. The attention that Germany is giving to ethanol production from sugar and sugar coproducts is not substantially different than their counterparts in the United States. There has hardly been a beet sugar producer in America that has not taken at least a cursory look at ethanol. Some have even gone to the point of a full feasibility evaluation.
 	
 Long-term, the opportunities perhaps rest in the conversion of the cellulose in the beet pulp to ethanol. But while that technology is being developed, there are serious plans underway to make the transition now and incorporate cellulose technology when the time is right. In addition, the price differential of gasoline between Europe and the United States, may make the economics of such a venture much more appealing.
 	
 Dietrich Klein a private consultant from Germany who sponsored the tour said, "For now we are just looking and evaluating options, but ethanol production is something that is quite high on our agenda, and the German sugar industry can, and likely will, play a major role in our future energy needs."

During the week of October 14th, a group of 19 representatives from Germany, many of which were sugar producers, toured three ethanol 
facilities in Kansas and Nebraska.

German Sugar Industry Eyes Ethanol

Canada's ethanol industry taking shape

 In early October, Reuters News Service reported that Saskatchewan will become Canada's largest ethanol producer with three 80 million liter per year plants to be built by Broe Companies and the provincial government. Broe will be the majority owner of each plant, with a 60 percent share The first plant is scheduled to open in the spring of 2004 in Belle Plain, Sask., near the provincial capital of Regina. The plant will reportedly use wheat as a feedstock. 				
 
 Announcements on the other two plants are expected early in 2003. They will reportedly be built near the towns of Tisdale and Yorkton, Sask. According to government officials, it is very likely that Saskatchewan will mandate ethanol blends once the province's ethanol industry is stable.
 In Manitoba, several groups are reportedly organizing to build ethanol plants of varying sizes after the Manitoba Premier Gary Doer announced several months ago that he plans to mandate the use of ethanol-blended gas across the province. Officials say Manitoba's ethanol industry could grow from 10 million liters per year to 140 million liters per year if the use of ethanol is mandated. A decision is expected to be made soon. 
 
 Bliss Baker, president of the Canadian Renewable Fuels Association, has called on the federal government to introduce a National Renewable Fuels Strategy that would mandate specific levels of ethanol and biodiesel in Canada's fuel, along with commercial incentives to make it happen.
 
 Brazil extends ethanol stock credit deadline through 2002 
 In late October, the Brazilian government extended the deadline to apply for ethanol fuel stock credit from the end of October to the end of the year. The government's National Monetary Council responded to a request from the Agricultural Ministry after delays in establishing norms meant cooperatives and distillers had only a matter of weeks to access the (BRZ) $425 million in official credit available. The government had intended to create a stock of up to one billion liters of ethanol, or around 12 percent of production, to ensure supplies through the start of the next sugarcane harvest in May. However, distiller representatives warn the stock probably won't be created, as the world-leading sugarcane harvest is already over 80 percent complete and much of the produce has already been committed. 
 
 Australia's ethanol industry defends itself
 Australian Biofuels (ABF) said the nation's ethanol industry was on the brink of collapse because of a concerted campaign of misinformation and lies staged against it. The Labor party has claimed that the government failed to tell drivers about possible engine problems resulting from using 10 percent ethanol blends. ABF CEO Trevor Bourne said the concerns were unwarranted and the result of misinformation.

Canada's ethanol industry taking shape

More than ever before, distillers dried grains dryers have become not only a vital asset to ethanol producers but a key element in the ensured profitability of dry-mill ethanol production. Today, because many ethanol producers rely on DDGS sales for as much as 20 percent of their total annual revenue, drying technology has become a serious, science-driven technology. 
 	
 Three companies lead the ethanol industry dryer business today: ICM, Inc., Ronning Engineering Company and Barr-Rozin. Here is a brief synopsis of each technology:
 

 ICM
 As a result of efficient design and innovative hot gas recovery systems, ICM's distillers grains dryers have, over time, proven to be energy efficient. 
 	
 "ICM's rotary drum dryers produce the "golden dried" DDGS that has become the product of choice among marketers today and is revolutionizing DDGS marketing worldwide," said ICM Engineering Manager John Caffrey. "The company's dependable and robust dryer designs help to lower operating and maintenance costs, greatly increasing ‘up' time from other previous drying technologies. 
 	
 The company says that its dryers produce the best "golden dried" DDGS color and all around feed quality for corn or milo and come with a one year parts and labor warranty. ICM also offers custom solutions to fit the specific needs of an ethanol facility, such as existing dryer component repair or modifications, total dryer system replacement, total plant and dryer system expansions, and total plant design. 
 	
 Today, ICM is installing many of its new dryers as "systems" - packages with dual rotary drum dryers including all associated equipment and conveying systems, access platforms, structures, piping, ducting, and even exhaust stacks. Again, unique to the industry, ICM designs and fabricates these components within their own property, which they believe maximizes quality control of the products manufactured. ICM also provides the optional thermal oxidizer system that provides very impressive reductions in odor and emissions, while producing enough steam to meet the steam requirements of the plant. 		
 
 Ronning Engineering
 Ronning's patented rotary drum dryer is a single-pass system that operates at relatively low temperatures, thereby reducing operating costs and decreasing the emissions of VOCs, which are closely regulated. The lower temperature also allows the system to have a longer product retention time, which improves quality control of the process and reduces damage of the valuable protein and fat content of the products. The greater product retention time also allows the REC system to increase the amount of heat transfer media (typically hot air) used per cubic volume of dryer. This, the company says, results in a physically smaller plant versus competing technologies for a given process. 
 	
 The rotary drum dryer is augmented by other products that are also proprietary to Ronning. These include centrifugal separators, cyclones, cooling and conditioning drums and other components that provide a "complete dehydration solution." 
 	
 Like ICM, Ronning also is offering a thermal oxidizer/waste heat boiler in its drying system package. 

 
 Barr-Rozin
 Although Barr-Rozin manufactures several types of dryers, the company has recently introduced its ring dryers to the ethanol industry, of which one major dry-mill ethanol plant builder is using is incorporating into its new plants.
 	
 The Barr-Rozin ring dryer reportedly creates smaller, more uniform DDGS particles that have an "appealing consistency." The ring dryer is electrical powered and has few moving parts, therefore making it long-lasting, the company says. The manufacturing and installation costs are similar to rotary drum dryers.

Dryer manufacturers have helped pave ethanol industry's success

EPM: As Swine Feed Sales Manager for Land O' Lakes Farmland Feed's western trade area, what are your responsibilities? On a broader scale, what is the scope of your work as a sales professional for this major feed marketer?
 
 Tilstra: Land O'Lakes Farmland Feed is a national farmer-owned agricultural cooperative serving nearly 1,000,000 producers and their families through 2,800 community cooperatives throughout the United States and Canada.
 	
 My responsibilities fall into two areas: (1.) I am supervisor for a group of sales professionals we call Swine Sales Consultants. They are among our most highly trained swine sales/service people and provide services to local cooperatives that are in Minnesota, northwest Iowa, South and North Dakota, Nebraska and Kansas; (2.) my other work area is to help with swine feed sales and swine production support services however I can across the western trade area of our cooperative system. 
 	The work is very interesting and professionally challenging. I sincerely appreciate the opportunities I have with this position.
 

 EPM: You were the first chairman of Agri-Energy, LLC, in Luverne, Minn. Are you still involved with that facility? In what capacity? 
 
 Tilstra: Our family's farming operation is one of the members of Cornerstone Cooperative (Cornerstone is majority owner of Agri-Energy, LLC). I was on the original board of directors of Cornerstone Cooperative and served on that board until I accepted my current position with Land O' Lakes Feed. Being chairman during the development and construction of the ethanol plant was a great experience. We often see the ethanol production process reduced to one or two slides during a presentation. The reality is that the process is incredibly complex.
 
 EPM: You also hold a director's seat on the United States Grain Council. Is your role with the U.S. Grains Council related to distillers grains? 
 
 Tilstra: Agri-Energy, LLC, is one of the Minnesota ethanol plants that got involved in funding research and promotion of dried distillers grains with solubles. As part of that effort, nine of the Minnesota ethanol plants became members of the United States Grain Council (USGC). Each member of the USGC has one voting director in that organization. I currently serve as Agri-Energy's director. The USGC has now become very active in helping position DDGS in the world marketplace. Trade teams have traveled the Pacific rim, Central America, and most recently Europe. I was able to be a part of the recent USGC DDGS market assessment team trip to Europe.
 
 EPM: As a third generation farmer, how do you characterize the importance of your first-hand farming/livestock experience in the work you are a part of in the feed and ethanol industries today? By the way, do you still farm and/or raise livestock? 
 

 Tilstra: I no longer raise livestock but am still involved with my father in corn/soybean production. As in any area, experience is a great teacher. I have a real appreciation for the day-to-day realities of making a crop and livestock production system work. Beef, stockcow, and farrow-to-finish swine production along with years of veterinary practice has given me a solid background in livestock production.
 	
 I gained a real appreciation of cooperative ideals while we were working through the mechanics and logistics of forming Cornerstone Cooperative. I became, and remain convinced, that cooperative involvement is the best hope of long term family-based farming survival. My work with Land O' Lakes Farmland Feed gives me the opportunity to help live out that strong belief.
 
 EPM: Getting to the topic at hand, how has the new generation of "golden DDGS" affected the viability of ethanol distillers grains as a feedstock that can be easily integrated into swine diets? 
 
 Tilstra: I need to preface my response by saying that all the information I'm discussing refers to DDGS from plants that are using 100 percent corn as their feed-stock. Sorguhm DDGS also is used successfully in swine diets. Research at the University of Minnesota demonstrated that DDGS from the dry-mill ethanol plants in Minnesota had higher levels of digestible lysine and higher levels of available phosphorus than had previously been understood to be the case. Swine diets are formulated based on levels of nutrients that are biologically available. Slight differences in levels of digestible lysine in an ingredient have tremendous effect on its economic value in the formulation process. For example, the following information compares traditional values to analysis values for "golden" DDGS:
 	
 In a hog finisher diet that included 10 percent DDGS, the "golden" DDGS would have a value of about $84 per ton as compared to about $67 per ton for the traditional product. (Comparison based on corn @ $1.93/bu, soybean meal @ $163.50/ton, L-lysine @ $70/cwt., and diets contained no added fat.)
 	
 At Land O' Lakes Farmland Feed we are using this new research information along with our proprietary research to recommend that swine producers use "golden" DDGS when economics make it reasonable to do so. Today's ethanol plants are capable of producing DDGS that has the higher levels of digestible lysine and available phosphorus useful in swine nutrition. Swine diets that include DDGS can be part of a total nutrient management plan that reduces excreted nitrogen and phosphorus in the hog manure. This becomes a second way that ethanol production has a positive contribution to the environment. Ethanol fuel helps with cleaner air and use of DDGS in swine diets can help reduce phosphorus levels in the swine manure applied to the land.
 
 EPM: When a swine producer tells you that it is not economically feasible to use DDGS in swine diets, what is your response? 

 
 Tilstra: The producer needs to look at the numbers. We are currently (October 24, 2002) seeing from a $1.00 to $2.00 per ton advantage for hog finishing diets containing 10 percent DDGS. We use a simple spreadsheet to continuously monitor relative values of the primary ingredients used.
 
 EPM: Regarding swine diets specifically, briefly explain the nutritional and physical requirements that are desired; basically, what are you looking for in a DDGS product?
 
 Tilstra: For corn DDGS to be used in swine diets we recommend selecting product that has a golden color and a pleasant, cereal odor. Darker color hues with slight burnt odor indicate a potential for lower lysine digestibility in swine. The supplier should provide information that shows the following minimum analysis:
 
 Crude protein: minimum of 26.5%
 Moisture: maximum of 12.0%
 Crude Fat: minimum of 10.0%
 Crude Fiber: maximum of 7.5%
 
 	The supplier should also provide some assurance of low probability of mycotoxin contamination. The dry-mill process does not necessarily destroy mycotoxins that may occur on the grain coming to the ethanol plant. Incidence of mycotoxicosis from feeding DDGS has been extremely low, however, the possibility of contamination is one of the factors that has to be considered when deciding on total diet inclusion levels of DDGS.

 
 EPM: Depending on who you talk to, inclusion rates vary from five percent to 50 percent of the swine's total diet. What's your professional opinion on inclusion rates for both nursery and grow-finish pig diets? 
 
 Tilstra: There are several factors to consider when deciding how much DDGS to add to swine rations. DDGS varies in nutrient analysis and nutrient bio-availability between and within ethanol plants. Levels over 20 percent in finishing feed can contribute to negative carcass characteristics. Levels of 10 percent are often observed (pork producer comments) to have a positive gut-health benefit. Mycotoxins may still be present. At current markets, using DDGS lowers feed cost. The list goes on, some positive, some negative. Considering all the factors, our Land O' Lakes Farmland Feed swine nutritionists recommend the following DDGS inclusion levels (expressed as a percentage of the total ration) when adding DDGS is demonstrated to be economically beneficial:
 
 Nursery:		5% max.
 Grow-Finish:	10% max.
 Sow Gestation:	20% max.
 Sow Lactation:	5% max.
 
 EPM: Is there a reduction in odor on the farm as a result of DDGS use in pig diets? 
 
 Tilstra: Research has demonstrated that there are no measurable differences in ammonia, hydrogen sulfide, or odor emissions as compared to traditional corn/soy diets. I have heard many producers comment that the barns smell different when they are feeding DDGS. I think they are noticing the smell of the feed containing DDGS.

 
 EPM: What are the potential drawbacks of integrating DDGS into swine diets? Recognized challenges, etc.?
 
 Tilstra: When used as we recommend, there are very few drawbacks. The challenges include product quality and variation, mycotoxins, and securing longer term, quantity pricing agreements. The growing ethanol industry is doing a good job working with us to help our pork producers get good quality DDGS in sufficient quantity.
 
 EPM: On our side (the ethanol producer side), what does the swine and ruminant market represent to the vitality of future business - to your best understanding?
 
 Tilstra: Ruminants have been the primary users of DDGS. The United States 100 million head per year hog industry represents a potential 3.5 million ton DDGS market if all the swine diets included 10 percent DDGS. If I understand the numbers correctly, that would take all of the DDGS from about 900 million gallons of ethanol production. For 2002, over one fourth of the total United States DDGS production is being exported. Poultry and swine use is increasing rapidly enough to keep pace with current increases in DDGS production. The new energy bill could result in DDGS national production levels growing from the current three million to possibly nine million metric tons annually. Domestic livestock use and exports are the "main events" for providing markets for DDGS.
 
 EPM: What is the bottom line with swine producers? Why will they buy our product in the years ahead? 
 
 Tilstra: The short answer is: pork producers will buy quality feed ingredients that help reduce their cost of production and/or increase their productivity. The expansion of the ethanol industry is producing the quantity and quality of DDGS that can be a part of hog diets. Land O' Lakes Feed is providing feed products and technical service to help the pork producers we work with realize the full benefit of using DDGS in their swine diets. At Land O' Lakes Feed we are convinced enough of the role of DDGS in animal diets that we have employees in the ingredients division dedicated full-time to DDGS sales. Jim Jolly (National Manager Distillers Grains, Land O' Lakes Feed Ingredients) and his staff, help ingredient purchasers at our local and regional feed mills secure quality DDGS for use in swine and other species diets.

 
 For additional information on using DDGS in swine diets:
 		
 Dr. Harold Tilstra
 Swine Sales Manager
 Land O' Lakes Feed 
 507-283-4198 
 htils@landolakes.com	
 
 Dr. Randy Walker
 Technical Service Manager
 Land O' Lakes Feed
 800-369-3060
 rwalk@landolakes.com	
 
 Dr. Kevin Herkelman
 Swine Technical Service

 Land O' Lakes Feed
 800-851-8810 n

Variability in digestible lysine levels in DDGS effects the value of swine feed products

October 2002

Columns

The Way I See It

Featured

Glacial Lakes Energy, LLC off to a clean start

Producers & marketers find innovative uses for ethanol's improved coproduct

More producers choosing to sell WDG

CSC's Steve Markham has 21 years in commodities trading and marketing

SweetPro packages distillers grains in in unique way

German Sugar Industry Eyes Ethanol

Dryer manufacturers have helped pave ethanol industry's success

Q&A: Harold Tilstra, Land O' Lakes Farmland Feed

October 2002.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Columns

The Way I See It

Featured

Glacial Lakes Energy, LLC off to a clean start

Producers & marketers find innovative uses for ethanol's improved coproduct

More producers choosing to sell WDG

CSC's Steve Markham has 21 years in commodities trading and marketing

SweetPro packages distillers grains in in unique way

German Sugar Industry Eyes Ethanol

Dryer manufacturers have helped pave ethanol industry's success

Q&A: Harold Tilstra, Land O' Lakes Farmland Feed

October 2002