DTN Weekly Distillers Grains Update
Green Plains Buys Cattle Feedlot in Kansas
Green Plains Inc. recently became the first U.S. ethanol producer to own a feedlot and use the distillers grains it produces to feed the cattle it owns.
The company announced on June 10 that it has acquired the assets of Supreme Cattle Feeders from Agri Beef Co., as well as the Cimarron Grain storage facility, both located near Kismet, Kan., in the southwest corner of the state.
The decision to purchase the feedyard was a perfect fit for the company, according to Todd Becker, president, CEO & director of Green Plains Inc. in Omaha.
"It was a good extension of our processing and distribution," he said. "It was a nice acquisition for us, but it doesn't define what we do."
Becker told DTN the company looks at cattle as "corn processing units," and said the feedyard was an extension of their operation of processing corn and producing feed.
Green Plains is based in Omaha, Neb., but has 12 ethanol plants located in Nebraska, Indiana, Minnesota, Iowa, Tennessee and Michigan.
The company's plants process more than ten million tons of corn and produce more than one billion gallons of ethanol, three million tons of livestock feed and 250 million pounds of industrial grade corn oil each year. The company is also involved in a joint venture to commercialize advanced technologies for growing and harvesting algal biomass.
Altogether, the 12 Green Plains plants produce approximately 2.9 million tons of distillers grains annually. However, the feedlot will only use between 100,000 and 150,000 tons of DDG.
The feedlot is in southwestern Kansas, which means the closest of Great Plains' plants are those in Nebraska. That area, however, is already a part of the company's distribution network.
"We ship plenty of DDG to southwest Kansas in the natural flow of what we do," he said. "We don't have plants close to there, but we do have plants that distribute in that area."
Becker said the feedlot will use distillers grains from one of Green Plains' plants, although the market will be the determining factor of where the feedlot sources its DDG.
"If our plants aren't the best market for distillers grains, we will buy from somebody else," he said. "The feedyard is a stand-alone business, so we have that option."
The feedyard will not use just one type of distillers grains (dried, wet, modified, etc.), but will use whatever kind is the best economically, or a combination of types of distillers.
Becker said the feedlot operation has approximately 70,000 head of cattle and 2,600 acres of land, 800 of which are allocated for the feedlot. All employees have been retained.
Agri Beef Co. has owned and operated Supreme Cattle Feeders for 19 years.
Supreme Cattle Feeders will continue under its present management from Agri Beef, who will continue as a cattle-feeding customer of Supreme. Agri Beef Co. has owned and operated Supreme for 19 years.
Becker said the idea of owning a feedlot made sense for Great Plains, but may or may not be a good idea for other ethanol producers.
"It's a good idea for us. I don't know about anybody else," Becker said. "From our standpoint, we are very, very happy with the decision. It matches our strategy of continued growth and we are set up very well for it because of our supply chain."
Cheryl Anderson can be reached at Cheryl.anderson@dtn.com.
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IN THE NEWS
Distillers Grain, Corn Oil Aid Ethanol Profitability
Ethanol profitability in Iowa is the best ever, as the ethanol industry has created a financial revival for rural America, according to an article by the Mason City Globe Gazette (http://bit.ly/…).
Walt Wendland, CEO of Homeland Energy Solutions in Lawler, Iowa, said in a recent speech, that the strength of the industry, in Iowa and other ethanol-producing states is aided greatly by distillers grains and corn oil, both vital coproducts of ethanol production. Distillers grains are sold mostly as a nutritious livestock feed and corn oil is used in biodiesel production.
Ethanol production in the U.S. has grown from a mere 2 billion gallons per year in 2004, to nearly 15 billion gallons in 2013. The industry has also played a huge role in the 158% increase in U.S. farm net income since 2003.
Approximately 90% of U.S. ethanol production comes from the Corn Belt: Iowa, Minnesota, Illinois, South Dakota, Nebraska, Kansas, Ohio, Indiana and Missouri.
Exports of ethanol are vital to ethanol profitability, as well as exports of dried distillers grains. However, the effects of recent decision by China to stop issuing permits for imports of DDG because of the MIR 162 trait that has not yet been approved there are yet to be seen.
Nebraska's "Advantage" Due to Crop, Livestock and Biofuels Production
Nebraska's top spot in cattle feeding and commercial red meat production is attributed to the "Nebraska Advantage," an interrelated system of crop, livestock and biofuel production, according to a new University of Nebraska-Lincoln report.
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That advantage includes the development of corn-based ethanol and distillers grains used for livestock feed, as well as soybean meal, a co-product of soybean processing also used for livestock, according to an article by the Grand Island Independent (http://bit.ly/…).
The report, titled "Nebraska Animal Agriculture: Economic Impacts of Cattle, Hog, Dairy and Poultry Industry Changes," noted that the total value of Nebraska's agricultural production was more than $25 billion in 2012, with the net value-added of that production totaling $8.8 billion.
The report also found that Nebraska is still not operating to its full potential, as it exports a high percentage of its crops -- more than one-third its corn crop and more than 80% of the distillers grains it produces. Keeping more crops flowing into in-state, value-added processing would lead to a greater economic impact, the report said.
Research for the study was funded jointly by the Nebraska Soybean Board and the Nebraska Corn Board.
Cheryl Anderson can be reached at Cheryl.anderson@dtn.com.
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DTN WEEKLY DISTILLERS GRAIN SPOT PRICES
| CURRENT | PREVIOUS | ||||
| COMPANY | STATE | 1/20/1900 | 6/13/2014 | CHANGE | |
| Bartlett and Company, Kansas City, MO (816-753-6300) | |||||
| Missouri | Dry | $185 | $198 | -$13 | |
| Modified | $90 | $95 | -$5 | ||
| CHS, Minneapolis, MN (800-769-1066) | |||||
| Illinois | Dry | $180 | $195 | -$15 | |
| Indiana | Dry | $175 | $185 | -$10 | |
| Iowa | Dry | $175 | $180 | -$5 | |
| Michigan | Dry | $200 | $200 | $0 | |
| Minnesota | Dry | $170 | $170 | $0 | |
| North Dakota | Dry | $170 | $170 | $0 | |
| New York | Dry | $200 | $200 | $0 | |
| South Dakota | Dry | $160 | $170 | -$10 | |
| Hawkeye Gold, IA (515-663-6413) | |||||
| Iowa | Dry | $163 | $168 | -$5 | |
| Modified | $60 | $70 | -$10 | ||
| MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) | |||||
| Kansas | Dry | $155 | $160 | -$5 | |
| POET Nutrition, Sioux Falls, SD (888-327-8799) | |||||
| Indiana | Dry | $155 | $175 | -$20 | |
| Iowa | Dry | $130 | $150 | -$20 | |
| Michigan | Dry | $170 | $190 | -$20 | |
| Minnesota | Dry | $130 | $150 | -$20 | |
| Missouri | Dry | $150 | $170 | -$20 | |
| Ohio | Dry | $165 | $185 | -$20 | |
| South Dakota | Dry | $115 | $135 | -$20 | |
| United BioEnergy, Wichita, KS (316-616-3521) | |||||
| Kansas | Dry | $165 | $165 | $0 | |
| Wet | $65 | $65 | $0 | ||
| Illinois | Dry | $200 | $205 | -$5 | |
| Nebraska | Dry | $165 | $165 | $0 | |
| Wet | $65 | $65 | $0 | ||
| Wisconsin | Dry | $190 | $195 | -$5 | |
| U.S. Commodities, Minneapolis, MN (888-293-1640) | |||||
| Illinois | Dry | $165 | $175 | -$10 | |
| Indiana | Dry | $170 | $175 | -$5 | |
| Iowa | Dry | $155 | $150 | $5 | |
| Michigan | Dry | $180 | $190 | -$10 | |
| Minnesota | Dry | $150 | $160 | -$10 | |
| Nebraska | Dry | $135 | $145 | -$10 | |
| New York | Dry | $200 | $200 | $0 | |
| North Dakota | Dry | $140 | $150 | -$10 | |
| Ohio | Dry | $175 | $180 | -$5 | |
| South Dakota | Dry | $140 | $150 | -$10 | |
| Wisconsin | Dry | $155 | $160 | -$5 | |
| Valero Energy Corp., San Antonio, TX (402-727-5300) | |||||
| Indiana | Dry | $175 | $175 | $0 | |
| Iowa | Dry | $140 | $140 | $0 | |
| Minnesota | Dry | $130 | $130 | $0 | |
| Nebraska | Dry | $140 | $140 | $0 | |
| Ohio | Dry | $175 | $175 | $0 | |
| South Dakota | Dry | $130 | $130 | $0 | |
| Western Milling, Goshen, California (559-302-1074) | |||||
| California | Dry | $235 | $250 | -$15 | |
| *Prices listed per ton. | |||||
| Weekly Average | $160 | $168 | -$8 | ||
| The weekly average prices above reflect only those companies DTN | |||||
| collects spot prices from. States include: Missouri, Iowa, Nebraska, | |||||
| Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan, | |||||
| Wisconsin and Indiana. Prices for Pennsylvania, New York and | |||||
| California are not included in the averages. | |||||
*The spot prices gathered by DTN are only intended to reflect general market trends and may vary. Please contact individual plant or merchandiser for exact prices.
If you would be willing to take a weekly phone call and have your distiller grains spot prices listed in this feature, please contact Cheryl Anderson at (308) 224-1527 or (800) 369-7875, or e-mail cheryl.anderson@dtn.com.
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| VALUE OF DDG VS. CORN & SOYBEAN MEAL | ||||
| Settlement Price: | Quote Date | Bushel | Short Ton | |
| Corn | 6/19/2014 | $4.5050 | $160.89 | |
| Soybean Meal | 6/19/2014 | $451.20 | ||
| DDG Weekly Average Spot Price | $160.00 | |||
| DDG Value Relative to: | 6/20 | 6/13 | 6/6 | |
| Corn | 99.45% | 107.21% | 119.73% | |
| Soybean Meal | 35.46% | 36.23% | 39.14% | |
| Cost Per Unit of Protein: | ||||
| DDG | $6.40 | $6.80 | $7.68 | |
| Soybean Meal | $9.50 | $9.88 | $10.33 | |
| Notes: | ||||
| Corn and soybean prices taken from DTN Market Quotes. DDG | ||||
| price represents the average spot price from Midwest | ||||
| companies collected on Thursday afternoons. Soybean meal | ||||
| cost per unit of protein is cost per ton divided by 47.5. | ||||
| DDG cost per unit of protein is cost per ton divided by 25. | ||||
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USDA MARKET NEWS/DISTILLER GRAINS PRICES
USDA WEEKLY DISTILLERS GRAINS SUMMARY (June 13, 2014)
| Dried | Modified | Wet | |
| FOB PLANT PRICES PER TON | |||
| Iowa | 140.00-170.00 | 65.00-80.00 | 50.00-55.00 |
| Minnesota | 155.00-165.00 | 80.00 | N/A |
| Nebraska | 150.00-170.00 | 75.00-88.50 | 49.00-65.00 |
| South Dakota | 155.00-162.00 | 80.00-80.50 | 50.00-55.00 |
| Wisconsin | 180.00-200.00 | 83.00-100.00 | NQ |
| Eastern Corn Belt | 170.00-200.00 | 90.00-92.00 | NQ |
| Kansas | 160.00-180.00 | NQ | 60.00-73.00 |
| Northern Missouri | 170.00-200.00 | 100.00 | 55.00-60.00 |
| DELIVERED PRICES PER TON | |||
| CIF NOLA | 175.00-205.00 | ||
| Pacific Northwest | 210.00-225.00 | ||
| California | 210.00-232.00 | ||
| Texas Border (metric ton) | 245.00-275.00 | ||
| Lethbridge AB | 190.00 | ||
| Chicago | 174.00-205.00 | ||
Dried Distillers Grain: 10% Moisture
Modified Wet Distillers: 50-55% Moisture
Wet Distillers Grains: 65-70% Moisture
CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Jun 17, 2014)
Distillers Dry Grains
FOB Truck 235.00 dn 10.00-30.00
Rail Delivered California Points 229.00 dn 16.00-17.00
PACIFIC NORTHWEST WEEKLY FEED (Tue Jun 17, 2014)
Offers for Distillers Dried Grains delivered in June by rail to feed mills in the Pacific Northwest were 235.00-252.00, 2.00 to 17.00 lower than week ago offers. Offers for distillers dried grains trans-loaded onto trucks and delivered during June to Willamette Valley dairies were 253.00-267.00, 5.00 5o 14.00 lower than week ago offers.
*All prices quoted per ton unless otherwise noted.
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RFA WEEKLY U.S. LIVESTOCK FEED PRODUCTION
| CO-PRODUCT OUTPUTS (metric tons) | |||||
| Week Ending | Distillers Grains | Corn Gluten Feed | Corn Gluten Meal | Total Feed | Corn Oil (lbs.) |
| 5/23/14 | 92232 | 9470 | 1754 | 103456 | 4828097 |
| 5/30/14 | 93326 | 9583 | 1775 | 104684 | 4885388 |
| 6/06/14 | 93923 | 9644 | 1786 | 105353 | 4916638 |
| 6/13/14 | 96709 | 9930 | 1839 | 108478 | 5062471 |
*Information from 2010 Weekly U.S. Fuel Ethanol/Livestock Feed Production report (http://www.ethanolrfa.org/…)
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DDG LINKS/RESOURCES
Organizations
*Distillers Grains Technology Council
http://www.distillersgrains.org
*National Corn Growers Association Corn Distillers Grains Brochure
*Iowa Corn
Nebraska Corn Board
*Renewable Fuels Association - Ethanol Co-Products
*American Coalition for Ethanol
*U.S. Grains Council
*South Dakota Corn Utilization Council
http://www.drieddistillersgrains.com
Government Sites
*Iowa Department of Agriculture and Land Stewardship/Office of Renewable Fuels & Coproducts
http://www.distillersgrains.com
University Sites
*University of Minnesota - Distillers Grains By-Products in Livestock
and Poultry Feed
*University of Illinois - Illinois Livestock Integrated Focus Team Distillers Grains site
http://ilift.traill.uiuc.edu/…
*University of Nebraska - Beef Cattle Production By-Product Feeds site
*University of Nebraska Extension
*Iowa Beef Center - Iowa State University
http://www.iowabeefcenter.org/…
*University of Missouri - Byproducts Resource Page
*South Dakota State University - Dairy Science Department - Dairy cattle research
(select "Distillers Grains" from the topic menu)
*Purdue University Renewable Energy Web Site
http://www.extension.purdue.edu/…
(select "Biofuels Co-Products from the menu)
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DDG CONFERENCES
*Distillers Grains Technology Council Inc.'s 16th Annual Distillers Grains Symposium
The Distillers Grains Technology Council will hold its 18th Annual Distillers Grains Symposium on May 14-15, 2014 at the Omni Mandalay at Las Colinas, Dallas, Texas. For information, contact the DGTC office at (502) 852-1575 or (800) 759-3448, or check the DGTC website (http://www.distillersgrains.org).
(If you are sponsoring or know of any event, conference or workshop on distillers grains, and would like to list it in the DTN Weekly Distillers Grains Update, please contact Cheryl Anderson (see contact info below).
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We welcome any comments/suggestions for this feature. Please let us know what information is valuable to you that we could include in the Distillers Grains Weekly Update. Please feel free to contact Cheryl Anderson at (402) 364-2183-1527, or e-mail cheryl.anderson@dtn.com.
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