USDA finds distillers grains offer greater feed value than corn

By Kris Bevill | October 26, 2011

A newly released report from the USDA appears to confirm what the ethanol industry has been claiming for years—distillers grains is a valuable feed source and can significantly reduce any impact of increased corn use for ethanol by replacing more than its share of corn or soymeal.

The USDA Economic Research Service report, “Estimating the Substitution of Distillers’ Grains for Corn and Soybean Meal in the U.S. Feed Complex,” finds that, on average, one metric ton of distillers dried grains with solubles (DDGS) can replace 1.22 metric tons of corn and soybean meal in the U.S. Because only the starch of the corn kernel is used for ethanol production, the remaining fat and fiber in DDGS are increased by a factor of three compared to unprocessed corn, the report stated. 

The Renewable Fuels Association immediately pointed out that the report serves to dispel the assumption that every bushel of corn processed by an ethanol plant generates an amount of feed equivalent to one-third of a bushel of corn. “The value of the animal feed produced by the ethanol industry has long been misunderstood, understated and misrepresented,” said Geoff Cooper, vice president of research and analysis at the RFA. “Distillers grains continue to be the industry’s best kept secret, despite the fact that we are producing tremendous volumes of this high value feed product today. Over the past several years, distillers grains have been one of the most economically competitive sources of energy and protein available on the world feed market. While some critics of the ethanol industry attempt to downplay the role of DDGS, the facts simply can’t be ignored.”

The report found that DDGS surpassed soybean meal to become the No. 2 feedstuff in the 2010-’11 crop year. Corn remained the most widely used animal feed. “While ethanol expansion raised demand for corn, DDGS from the dry-mill production process partially offsets the impact on the feed market,” the report’s authors stated. “Consequently, the net effect in the domestic feed market of a bushel of corn being used for ethanol production is less than a bushel.”

The market for distillers grains is also expected to continue to grow, with beef cattle remaining the main consumers of the product, followed by dairy cattle, swine and poultry. “Some in industry or other researchers believe that consumption of DDGS by dairy cattle is nearing maximum use levels,” the report’s authors wrote. “We do not find such a constraint at this time.” The authors also disputed claims that smaller cattle, hog and poultry operations will not be able to accommodate truckloads of distillers grains, stating that those farm operators could devise creative solutions. “For example, DDGS can be mixed in with the concentrate mix and delivered to the farm and stored in the working storage located on the farm,” they stated. “For some beef cow operations, DDGS can be fed in range cubes, stored in bunker silos as is, or mixed with other materials, such as straw or corn fodder.”

Cooper said information from the USDA’s report should be used to recalculate the greenhouse gas (GHG) emission values associated with corn ethanol production. For example, the California Air Resources Board currently assumes that one metric ton of DDGS replaces an equal amount of corn. Updating its analysis to reflect the additional value of DDGS could have a significant downward impact on the lifecycle GHG emissions for ethanol, he said. “USDA’s new analysis clearly shows the importance of accurate DDGS accounting,” he said. “The [U.S.] Environmental Protection Agency and CARB should immediately adopt these new findings into their GHG modeling for the RFS2 [renewable fuel standard] and LCFS [low carbon fuel standard].”

Interestingly, the report also concluded that future industry surveys could provide additional information on DDGS, including market share information for each type of livestock and poultry and substitution rates. If information were available for other ethanol co-products as well, such as WDGs, corn gluten feed and corn gluten meal, the effects of ethanol coproducts on the U.S. feed complex could be more precisely estimated, the authors stated. The USDA’s National Agricultural Statistics Service had planned to begin conducting that exact type of survey on a five-year basis beginning in 2012, but was forced to cancel its plans in the face of anticipated budget cuts.