Ethanol plants are being built all over the corn belt. 97 plants are operating and another 34 new plants or expansions are underway, according to the Renewable Fuels Association. A by-product of the process is corn mash, or distillers grain. The distillers are hoping to sell it all to nearby livestock farms. (Photo by Lester Graham)
The federal government has called for more renewable fuels for cars and trucks over the next few years. Ethanol from corn is expected to meet much of that demand. As ethanol production increases, the distillers are looking for ways to make money on some of the by-products of the process. The GLRC’s Lester Graham reports on how the ethanol distillers might market what’s left over after turning corn into ethanol:
Transcript
The federal government has called for more renewable fuels for cars
and trucks over the next few years. Ethanol from corn is expected
to meet much of that demand. As ethanol production increases, the
distillers are looking for ways to make money on some of the by-
products of the process. The GLRC’s Lester Graham reports on
how the ethanol distillers might market what’s left over after
turning corn into ethanol:
(Sound of construction)
New ethanol plants are being built every year. 97 plants are in
operation today and the Renewable Fuels Association indicates 34 new or
expanded plants are under construction. The ethanol refinery
industry is gearing up for the expansion that the government wants.
Ethanol plants are basically giant corn alcohol stills. They produce
huge batches of – well – moonshine, but like moonshiner stills,
there’s a corn mash left over. It’s called distillers grain, and with
all the new plants coming online, there’s going to be a lot more of the
by-product in the future. Distillers grain can be used as livestock feed.
So, the agricultural industry is trying to get more cattle farmers and
others to buy it.
Tracy Jones is a farmer in northern Illinois. He says the agriculture
industry and the ethanol plants that want to get rid of the distillers
grain cheaply, have been encouraging farmers to expand their
livestock operations.
“And I know some producers that are maybe expanding. It’s a
good deal, but it’s not that good of a deal, and there’s a lot of other
issues that go into the cattle feeding business besides just getting
cheap feed.”
Jones has been feeding wet distillers grain from Wisconsin to his
cattle for about a year. Jones says the distillers grain makes sense
as long as the price doesn’t get too high.
“We need to buy it cheaply. We’re basically using it as a corn
replacer. So, when we have cheap corn, you still need to buy the
by-products cheaply also.”
Jones says his cattle are gaining weight at about five-cents a pound
cheaper using distillers grain as part of the mix of feed. Part of the
reason is the price is lower, but distillers grain has another
advantage… it’s higher in protein than plain corn. It’s got about the
same protein content as soybean meal.
That makes Jason Anderson think this stuff might be good to
export overseas as a food for people. Anderson is the Economic
Development Director for the city of Rochelle, Illinois. An ethanol
plant is being built in his city. With a couple of major railways and
a cargo container transfer station in his town, exporting dried distillers
grain would be easy. Because of the nation’s trade deficit, about
half the cargo containers go back to their original country empty.
Anderson says the by-product could be dried to a sort of high-
protein corn meal and shipped.
“Dried distillers grain could be put into intermodal containers,
which are sealed containers, put on a train and sent to the west
coast. They could also be shipped over the Pacific Ocean to starving
countries on the other side of the world.”
Corn tofu, anyone?
Exporting dried distillers grain as human food overseas hasn’t been
discussed much, but shipping it to cattle feedlots in Texas and
other cattle country has been discussed. Agriculture experts think
the ethanol plants located in the corn-belt won’t find enough
livestock in the immediate area to buy the product.
“At this point, where the livestock are and where the plants are
there’ll be a lot of them that has to be shipped.”
Jim Hilker is an agriculture marketing expert at Michigan State
University. He says he’s not sure the ethanol plants will make
much money on distillers grain, especially if they have to ship it to
cattle feedlots out west. That’s because they’ll have to dry the
product… and that adds to the cost.
“The first ones, I think, are making some money before we get
saturated on this, and I think if we put a system for handling it and
stuff in place, they’ll probably. But, if they can more than cover
the cost – remember, otherwise there’s disposal fees too. So, a
break-even here is a pretty good deal.”
So if the distillers just recover the drying and shipping costs, it
would be better than paying to dump the distillers grain in a
landfill.
But farmer Tracy Jones says he thinks the ethanol manufacturers
have already figured out the by-product will be abundant… and
they’re still counting on making some money on it.
“When they do their financials for their ethanol plant, they don’t
plan on giving this product away. So, they need to get something
for it.”
Jones says he’s noticed the ethanol producers don’t call distillers
grain a by-product of the process. They call it a co-product. He
thinks that’s a little marketing ploy that indicates the ethanol
plants definitely plan to demand a good price for the livestock feed,
regardless of the glut on the market.
For the GLRC, this is Lester Graham.