Embracing the Alternatives

In some areas of the world, feed grains are more viable for ethanol production than corn. EPM evaluates feedstock options, including a Canadian wheat variety called AC Andrew and barley, and some projects where feed grains are being used make fuel and feed products.
By Anna Austin | April 14, 2009
Wheat is the ethanol feedstock of choice in Western Canada as it performs better in the field than corn. According to the Canadian Renewable Fuels Association, nine of the 21 ethanol plants in the country—currently operating or under construction—use or plan to use wheat. These plants are located in the provinces of Alberta and Saskatchewan. Among these ethanol producers, AC Andrew soft white spring (SWS) wheat is the variety of choice.

In the U.S., barley isn't just for beer brewing and livestock feed. Several companies, including Virginia-based Osage Bio Energy, have revealed barley-to-ethanol projects within the past year. Osage is currently constructing a 55 MMgy facility, which will use regionally grown barley to produce ethanol and feed products. The company plans to have its first facility on line by the spring of 2010, and expects to build three additional plants.

In Montana, Montana Microbial Products LLC, in cooperation with the U.S. Department of Agriculture, has developed a process to make ethanol and barley protein concentrate, which could replace fishmeal in aquaculture diets. The company operates a pilot plant in Butte, Mont., and is in the process of commercializing that facility.

In some areas, making ethanol from corn just isn't possible. So what is it about AC Andrew and barley that makes them attractive as ethanol feedstocks?

Analyzing AC Andrew
AC Andrew is the highest-yielding SWS wheat variety presently registered in Western Canada and is the most commonly grown variety of Canadian Western SWS wheat, according to SeCan, the largest supplier of certified seed to Canadian farmers. The variety typically yields 15 percent to 19 percent higher than regular low-protein SWS wheat, which is perhaps its most attractive quality. It is also known for its high yields ranging from 60 to 75 bushels per acre.

AC Andrew's high starch content, compared with other wheat varieties, also appeals to producers. The SWS wheat class in general is the lowest protein wheat class, at about 2 percent to 3 percent lower grain protein than the more popular Canada Western red spring wheat, which accounted for 70 percent of all Western Canadian wheat production in 2007.

Lower protein content generally leads to higher yields and increased starch levels in wheat kernels. AC Andrew has higher starch levels and higher yields and an ideal protein content of about 12 percent, making it a desirable variety for many ethanol producers.

Because AC Andrew is—like other SWS wheat varieties—bred for irrigated regions of southern Alberta and Saskatchewan there are some growing risks. For example, cooler than normal temperatures or an early fall frost can delay crop maturity, and drought stress can reduce yields and increase grain protein content. In addition, pre-harvest sprouting can occur under wet harvest conditions.

Last fall, Terra Grain Fuels, a Saskatchewan ethanol producer, completed construction of the largest wheat ethanol plant in North America—a 150 MMly (39.6 MMgy) ethanol plant last fall near Belle Plaine. In addition to ethanol, the plant produces 163,800 tons of distillers dried grains annually. TGF is an advocate of AC Andrew and says it is the variety of choice because of its ethanol friendly characteristics. The company will, however, contract for all Canadian Prairie spring red and white wheat varieties and certain winter wheat varieties.

Upon reaching its full capacity, TGF will purchase and consume approximately 15 million bushels of locally grown wheat annually.

Fishing for New Markets
As prices have dipped, many farmers have shied away from barley and focused on wheat. However, a unique market has emerged and Bob Kearns, a partner in Montana Microbial Products, is confident that it may rejuvenate enthusiasm in barley.

MMP, in a joint venture with the USDA Agricultural Research Service, has developed a process to make ethanol and barley protein concentrate, which can replace fishmeal in aquaculture diets. "Aquaculture is the fastest-growing part of the agricultural market," Kearns says. On an annual basis the world uses 5 million metric tons of fish meal. "Over the past four or five years, we've been working to develop a plant-based protein that could be used," he says. "We looked at soy and had some technical success, but the fish wouldn't eat the soy meal, which led us to barley."

The fractionation process that MMP and ARS developed creates two streams. "A sugar stream which we ferment to ethanol, and a protein stream that runs at about 60 percent protein," Kearns says. "In fish feeding studies, we found that it is a 100 percent replacement for fish meal, and it tastes the same. If you substituted one-third barley protein concentrate for one-third of the fish meal, there is a big improvement in the feed conversion ratios. If you substitute two-thirds barley protein concentrate, it is even bigger."

When comparing the barley protein concentrate with corn-based distillers grains, which sells for about $125 per ton, the barley protein concentrate fish meal will sell for $700 to $1,200 per ton, according to Kearns. "So in this situation, the value is really high for the protein. Regarding the food-versus-fuel debate, this is probably the most efficient way we can think of to get protein into the human diet," he says. "We are taking dryland barley, normally used for feed barley, and turning it into a product that has a high conversion rate into human food, and at the same time making ethanol from it. The big markets for the barley protein is for salmon and shrimp feed. The U.S. produces about 24,000 tons of trout and about 10,000 tons of salmon per year. If you can get into that market, the numbers are huge," Kearns says

Feed conversion ratios for trout run about 1.1 pound of feed to a pound of trout. When compared with feeding distillers grains to cattle, five or six pounds of feed converts to about one pound of beef, according to Kearns.

Bottom-Line Boost
Ethanol for this project is the coproduct and the main product is the barley protein. "We think it is a different twist, and it lets you make a very nice return when ethanol is selling like it is today," Kearns says. "It adds to our bottom line, and the real value is driven by the barley protein."
MMP and ARS intend to build the initial plant in Montana, the largest barley producing state in the U.S. "Out of the two types of barley—malt barley is relatively expensive, and people are doing well raising it primarily on irrigated acres," Kearns points out. "Feed barley has been in a significant decline in the past five or six years because there isn't much of a market for it and the growers don't make money."

Many farmers have switched to wheat to take advantage of the higher prices, and are not rotating every other year with barley. Kearns says that has created some problems because wheat on wheat requires the use of more herbicides. "Wheat growers know that if they can do a barley rotation, they can increase soil fertility, but they just don't have a market for the barley," he says. Kearns says they would be prepared to pay 50 percent more for the feed barley, thus providing the farmers with a viable alternative to wheat.

Kearns says the engineering for the 2 MMgy feed barley-based project is complete. "Capital is still being raised, but talks are ongoing with the USDA regarding a guaranteed loan to build the facility," he says. "Our intent is to break ground in Montana this year, and be producing ethanol next year. [The plant] will be relatively small, targeted to replace one-third of the fish meal used in trout diets in the Western U.S—about 9,000 tons of barley protein concentrate and about 2 million gallons of ethanol."

Kearns says in the future, they will build a much bigger plant to serve the U.S. and Canadian markets. "This scenario might give growers an opportunity where the price is competitive with wheat, and requires less fertilizer, yields higher, and breaks insect and disease cycles while improving the productivity of the wheat," he says. "From our perspective, fish growers get a lower priced product and there are fewer environmental issues associated with it; growers have an alternative crop; and we are making ethanol as a transportation fuel. We don't see any downsides. It's value-added economics at a basic level."

Anna Austin is an Ethanol Producer Magazine staff writer. Reach her at aaustin@bbiinternational.com or (701) 738-4968.