Byproduct Evolves Into Preferred Ingredient

Distillers grains are no longer seen as byproducts, least of all by the ethanol producers producing the feed ingredient, writes Kurt Rosentrater. Unlike in past days, the inherent value of coproducts are not fully recognized.
By Kurt A. Rosentrater | June 06, 2014

Listening to the speakers at the recent Distillers Grains Symposium in Dallas, I had the chance to reflect on our industry’s past and future.  Indeed, the development of the types and qualities of distillers grains and other coproducts in the marketplace today began generations ago at beverage distilleries. At the turn of the 20th century, as various states adopted regulations to prevent pollution by dumping distillery waste into rivers, its use as a feed ingredient was born. With the advent of the fuel ethanol industry after World War II, these byproduct feeds were increasingly used. During the initial buildup in the late 1970s and early 1980s, and then the exponential growth of the past decade, distillers grains quality has come to the forefront of many discussions.

Long gone are the days when distillers grains (dry, wet or modified) are seen as byproducts only, when the ethanol plants are in business only to produce fuel. The inherent value of coproducts is now recognized, as evidenced by the increasing number of plants that have installed centrifuges and are selling both distillers oil and low-oil distillers grains. In fact, the sale of distillers oil has become economically important during the past few years, especially in light of the challenges the ethanol industry has faced.

Selling coproducts is a balancing act between many competing factors in the marketplace. We have the interests of the ethanol and beverage alcohol plants that produce the coproducts balanced against the livestock industry, comprised of domestic and international beef, dairy, swine and poultry customers. Some livestock producers actually view DDGS as a preferred feed ingredient, due to multiple benefits that it brings to their feeding operations. Add to this coproduct price (in relation to competing ingredients) and availability (including logistics such as this year’s rail transport issue).

Finding the right balance has taken tremendous effort over the years. Many have been involved in this endeavor, and much progress has been made. It is instructive to examine our progress to date. Back in 2005, we published an article in the inaugural issue of Distillers Grains Quarterly magazine and outlined the opportunities and challenges that our industry faced. In 2005, the top 10 research and development priorities included: 1) Augmenting use in species-specific livestock markets. 2) Improving nutritional content, quality and value. 3) Optimizing and maximizing inclusion rates; 4) Developing livestock feeds with higher value. 5) Utilizing next-generation coproducts from new ethanol processes. 6) Standardizing analytical laboratory methods. 7) Educating livestock producers. 8) Transportation issues. 9) Fractionating nutrients into concentrated streams. 10) Environmental issues. The list of other potential issues included antibiotic residues, sulfur and phosphorous levels, mycotoxin contamination, energy consumption and cost, optimizing coproduct quality and ethanol production, variability and consistency, flowability and developing other value-added uses.

Fast forward to 2014. Some of these issues have been completely resolved, such as the standardized laboratory procedures. Unfortunately, most of the rest still require ongoing efforts to manage or mitigate. Several emerging issues were discussed at the recent DGTC symposium and include:

* Complying with the Food Safety and Modernization Act regulations. The multi-tiered regulations will require significant effort to meet and all producers of fuel ethanol and beverage alcohol will be required to comply, although very small producers will be exempted from some of the requirements.

* Understanding performance impacts in various species when feeding low-oil distillers grains. Some work has been done, but more is needed to fully understand how best to feed these relatively new coproducts.

* Understanding the effects of fiber removal, especially in monogastrics. Some plants are starting to implement this next step to cellulosic ethanol. Understanding the impacts on coproducts and how to use them in livestock feeds is still in its infancy.

* Incorporating other new processing technologies at ethanol plants that alter or produce entirely new coproducts. What is their value, how can they be used, and under what official feed definition from the Association of American Feed Control Officials do they fit? Or, will they require a new definition?

* Protecting export trade. China imports about half of the DDGS shipped from the U.S. Issues with unapproved genetically modified traits in corn could be problematic this year, potentially hindering sales to China.

Overcoming our other challenges and improving coproduct quality and value is not yet complete. We must continue our efforts to achieve balance amongst the ethanol and beverage plants, livestock producers, price and availability.

Author: Kurt A. Rosentrater
Executive Director,
Distillers Grains Technology Council