DDGS Challenges, Old and New

The latest and greatest issues impacting distillers grains production and use was discussed at the recent Distillers Grains Technology Council’s 19th Distillers Grains Symposium, writes Kurt Rosentrater.
By Kurt A. Rosentrater | June 05, 2015

Several years back someone asked me if everything that could be done with distillers grains was done. It is amazing how innovation continues to percolate through the industry and distillers coproducts continue to evolve, as do the industries that produce as well as consume them. At the recent Distillers Grains Technology Council’s 19th Distillers Grains Symposium in Kansas City, the latest and greatest issues to impact distillers grains production and use, and thus the fuel ethanol and beverage alcohol industries, were discussed. Of course, the main concerns that affect the partnership between alcohol plants and livestock producers include DDGS price and availability. 

To fully explore the issues, the symposium consisted of several tracks. These included: 1) economic issues, including supply and demand, sales and marketing, both domestic and export; 2) livestock nutrition; 3) new processes and new coproducts; 4) effects of manufacturing processes on coproduct properties and quality; 5) leveraging and integrating systems to obtain greater value for DDGS; and 6) regulatory issues, including the Food Safety and Modernization Act and implementing hazard analysis and critical control point (HACCP) programs at ethanol plants.

In terms of markets and economics, quality and consistency is still critical for the industry. Beef and dairy cattle still consume the lion’s share of distillers coproducts, and the new USDA coproducts survey has been a very useful tool so far. Surprisingly, almost one-third of ethanol coproducts in the U.S. are marketed as wet feeds. More important to coproduct values, however, is the international export market. In recent years, China has become the primary importer of DDGS. Due to this demand, the sales price of DDGS was actually higher than that of corn in recent years. In fact, when the Chinese government decided to restrict DDGS imports last summer, the price of DDGS collapsed here in the U.S. The silver lining to that situation, though, was that U.S. livestock producers decided to start using more in their rations again, as the price of DDGS was substantially discounted compared to the price of corn, at least on a short-term basis. This year, Chinese imports are again on the rise. It will be very interesting to see how the export market ultimately affects coproduct prices here in the U.S. during the coming year.

As always, the livestock nutrition portion of the program addressed current knowledge in terms of feeding recommendations, challenges and opportunities for the beef, dairy, swine and poultry industries. As coproducts have evolved in recent years to a lower oil (and thus energy) level with the rapid implementation of corn-oil extraction systems throughout the industry, livestock nutritionists and researchers have endeavored to understand how best to use these new coproducts vis-a-vis traditional distillers grains. From the presenters this year, it is clear that the livestock industry has progressed significantly, and lower-oil coproducts are becoming well-understood via many ongoing feeding trials. Not only do distillers grains offer price advantages compared to other ingredients, but they also offer nutritional and digestibility benefits as well. And we are seeing greater inclusion levels than ever in not just ruminant diets, but also swine and poultry diets.

During the discussion of new processes and new coproducts, several speakers provided insights on their approaches to process innovation and next-generation coproducts that are being commercialized. In fact, several fractionated coproducts are hitting the market. These are primarily high-protein feed ingredients, and arise from upstream separations, not fractionation from the DDGS (see my column in the March issue on utilizing the fiber fraction). How much more will livestock producers be willing to pay for these new ingredients? Feeding trials will be necessary to help establish these new values. For certain, protein content of these new products is much higher than traditional DDGS. And, not only can protein be economically concentrated, but corn fiber can be as well. This fiber is a material that can be broken down by enzymes and then fermented into cellulosic ethanol at the ethanol plant (which then qualifies as an advanced biofuel). Indeed, as these systems become commercialized and implemented throughout the industry, we will need a better understanding of how best to use these in the livestock industry.

Not only does fractionation allow ethanol plants to obtain truer nutrient values for DDGS, but so does integration of ethanol plants with livestock feeding operations. One of the talks reviewed the economic advantages that can occur by this type of synergism. And, as the industry evolves into Generation 1.5 and Generation 2.0 ethanol production, these types of integrations could show even more economic benefits.

At the end of this summer, the U.S. Food and Drug Administration is slated to release the final rules for FSMA and guidance on current good manufacturing practices. Our speakers discussed the issues that your companies should be worrying about and preparing for. Although the new regulations aren’t requiring an HACCP plan, the components in such a plan provide one way to help meet some of the FSMA requirements.  Yes, FSMA will change the way that many companies do business, but implementing steps to comply should be well underway at most plants.

All in all, our 19th annual symposium covered many facets of coproducts, from grain kernels all the way through the animals consuming the coproducts, and everything in between. Hopefully we offered something for everyone. There were several major takeaway messages from our speakers. First, coproducts are continuing to change in both physical and nutrient properties. The true value of the nonfermentable materials in ethanol plants are becoming apparent not only to the ethanol plants, but also to the livestock producers as well as affiliated industries. Yes, starch is used to produce alcohol, but ethanol plants are also feed-manufacturing plants, and all of the other nutrients have considerable value. Additionally, as our industry becomes more globalized due to exports (of both the DDGS and ethanol), the market values we are used to seeing may be subject to unanticipated shifts.

To answer the question that I led the article with: Yes, we still have much work to do to improve the value and utilization of ethanol coproducts. Our industry recognizes these challenges (both old and new) and continues to grow and evolve.

Next year we will be holding our 20th annual symposium in St. Louis. We hope to see you there!

Author: Kurt A. Rosentrater
Executive Director, Distillers Grains Technology Council
Iowa State University
515-294-4019
karosent@iastate.edu