DTN Weekly Distillers Grains Update

New North Dakota Ethanol Plant Uses Steam Power

A new ethanol plant in North Dakota not only produces ethanol at less cost but is also saving money on drying distillers grains.

The ethanol plant was built across the road from a coal-fired electric power plant, which supplies steam to the ethanol plant via underground pipes, according to Jeff Zueger, chief operating officer of the new Dakota Spirit AgEnergy ethanol plant in Spiritwood, North Dakota.

The plant was developed and is about 78% owned by Minnesota cooperative power company Great River Energy.

"Instead of having a boiler and making steam with natural gas or other power, we take the waste steam off the turbine and use that for the ethanol production process," he said.

Zueger said the company has two plants that operate in the same manner. The new plant in Spiritwood has been in operation since June, while the other plant, Blue Flint Ethanol in Underwood, North Dakota, has been in operation since 2007.

"It's pretty unique. We take steam that usually would be waste and use it directly in the process for energy, then send it back," he said.

The technology lessens the cost of building the operation, as the company doesn't have to build or operate a boiler. Also, the company doesn't have to have water treatment to clean water for the boiler.

The plant also has less environmental impact than traditional ethanol plants. The technology gives the company much lower carbon intensity scores, since they are using steam that was previously unusable.

The plant will produce an estimated 65 million gallons of ethanol annually, producing about 20% of the fuel used in North Dakota, Zueger said. To reach its targeted western and southern markets, the plant will fill one unit train of 100 tank cars approximately every 18 to 20 days.

DISTILLERS GRAINS

The plant will produce about 198,000 tons of distillers grains and 6,900 tons of industrial corn oil to be used in both livestock feed and bio-diesel, Zueger said. The company will have the ability to make modified and fully dried distillers grains.

"What's unique is that we have steam tube dryers. So our distillers grains are not dried with gas combustible systems, but steam in a thermal energy dryer," Zueger said. "Only a handful of plants have steam tube drying."

The steam tubes allow the company to dry distillers grains at a lower cost.

"This was one of our objectives, to be more competitive from an energy standpoint," Zueger said.

He pointed out steam tube technology allows distillers grains to be dried at a lower temperature than traditional dryers. This allows for a more consistent, high quality product.

Over-drying can damage the quality of distillers grains, making them darker in color and giving them a burnt odor. In addition, too much heat can damage the protein in the distillers and reduce how much animals can utilize that protein. Dark brown distillers grains also have less value in the eyes of buyers, who prefer the typical yellow golden color.

With the production of corn oil, the company's distillers grains will be considered, de-oiled or low-oil, as are the majority of distillers grains currently being produced. While traditional distillers grains range between 10% to 15% oil, Dakota Spirit AgEnergy's distillers will have a fat guarantee around 8%. This is a little higher than some low-oil distillers grains being produced, which can be as low as about 4%, Zueger said.

The company will be shipping its distillers grains by rail, as Zueler said there is currently not enough demand locally for all the plant will produce.

Gavilon, a third party merchandiser, will market all of Dakota Spirit AgEnergy's distillers grains, but the company will market within North Dakota itself, as Zueger said he feels it is important to work with local buyers directly.

Although the company has only shipped one unit train of distillers grains so far, he said they have a pretty good sense of where the distillers grains will move to.

"We will most likely move our distillers to the beef industry, but we could move into any appropriate downstream market," he said. "It's a pretty exciting time for us."

Cheryl Anderson can be reached at Cheryl.anderson@dtn.com.

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IN THE NEWS

Canadian DDG Buyers Visit U.S.

The U.S. Grains Council recently sponsored a team of Canadian end-users of U.S. dried distillers grains with solubles on a trip to Michigan, according to an article by the Council (http://bit.ly/…).

The purpose of the trip was for the Canadian team to learn about additional ways to save costs on logistics, increase demand for U.S. DDGS and corn, as well as touring an ethanol plant.

With only the St. Clair River between Michigan and Ontario, there are recurring differences in prices for corn and DDGS, as costs are often inflated by deadheading, or trucks running empty between delivering one load and picking up another. Trucks are often deadheading in both directions, wasting capacity and inflating costs.

Jim Zook, executive director of the Corn Market Program of Michigan, the group which co-sponsored the trip, said such challenges can be addressed. One suggestion was the development of a comprehensive list of trucking contacts and better coordination in both Canada and the U.S.

The trip included discussions about the use of antibiotics in ethanol production, utilizing low-oil DDGS and overcoming constraints in inclusion rates due to pelleting problems. The team was also given information on the outlook for this year's U.S. corn crop and how that could affect DDGS production in 2015.

Cheryl Anderson can be reached at Cheryl.anderson@dtn.com.

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DTN WEEKLY DDG SPOT PRICES

CURRENT PREVIOUS
COMPANY STATE 7/31/2015 7/24/2015 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $160 $160 $0
Modified $70 $65 $5
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $150 $155 -$5
Indiana Dry $155 $160 -$5
Iowa Dry $150 $155 -$5
Michigan Dry $150 $150 $0
Minnesota Dry $135 $135 $0
North Dakota Dry $135 $135 $0
New York Dry $160 $168 -$8
South Dakota Dry $135 $135 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $150 $150 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $150 $155 -$5
Iowa Dry $145 $150 -$5
Michigan Dry $148 $150 -$2
Minnesota Dry $150 $160 -$10
Missouri Dry $155 $155 $0
Ohio Dry $150 $153 -$3
South Dakota Dry $140 $140 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $140 $140 $0
Wet $55 $55 $0
Illinois Dry $168 $168 $0
Nebraska Dry $140 $140 $0
Wet $55 $55 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $160 $160 $0
Indiana Dry $155 $150 $5
Iowa Dry $140 $140 $0
Michigan Dry $150 $150 $0
Minnesota Dry $145 $140 $5
Nebraska Dry $140 $140 $0
New York Dry $160 $165 -$5
North Dakota Dry $140 $135 $5
Ohio Dry $150 $155 -$5
South Dakota Dry $135 $130 $5
Wisconsin Dry $150 $150 $0
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $150 $160 -$10
Iowa Dry $140 $145 -$5
Minnesota Dry $145 $150 -$5
Nebraska Dry $135 $140 -$5
Ohio Dry $155 $165 -$10
South Dakota Dry $125 $130 -$5
Western Milling, Goshen, California (559-302-1074)
California Dry $205 $210 -$5
*Prices listed per ton.
Weekly Average $146 $148 -$2
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 7/30/2015 $3.7325 $133.30
Soybean Meal 7/30/2015 $357.10
DDG Weekly Average Spot Price $146.00
DDG Value Relative to: 7/31 7/24 7/17
Corn 109.52% 102.77% 93.77%
Soybean Meal 40.88% 41.23% 39.60%
Cost Per Unit of Protein:
DDG $5.84 $5.92 $5.76
Soybean Meal $7.52 $7.56 $7.65
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 (Jul 24, 2015)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 138.00-160.00 60.00-72.00 40.00-50.00
Minnesota 120.00-150.00 57.00 34.00-45.00
Nebraska 125.00-148.00 56.00-77.00 33.00-52.00
South Dakota 125.00-135.00 64.00-69.50 44.00-46.00
Wisconsin 150.00-160.00 66.00-70.00 NQ
Eastern Corn Belt 144.00-175.00 55.00-75.00 NQ
Kansas 140.00-165.00 NQ 45.00-58.00
Northern Missouri 145.00-160.00 NQ 34.00-45.00
DELIVERED PRICES PER TON
CIF NOLA 192.00-215.00
Pacific Northwest 199.00-208.00
California 201.00-210.00
Texas Border (metric ton) 220.00-235.00
Lethbridge AB 170.00
Chicago 170.00-180.00

Dried Distillers Grain: 10% Moisture

Modified Wet Distillers: 50-55% Moisture

Wet Distillers Grains: 65-70% Moisture

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Jul 28, 2015)

Distillers Dry Grains

  Rail to California Points           200.00-210.00    dn 10.00
  FOB Truck to California Points      207.00-215.00    up 22.00-25.00

PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue Jul 28, 2015)

Distillers Dried Grains: Offers for Distillers Dried Grains delivered in September by rail to feed mills in the Pacific Northwest were steady to 2.00 lower from 204.00-208.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were also steady to 2.00 lower from 222.00-223.00.

*All prices quoted per ton unless otherwise noted.

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NASS/USDA MONTHLY CO-PRODUCTS PRODUCTION

Dry and Wet Mill, Co-products and Products Produced - United States

March 2015 - May 2015

Jul 1, 2015

Highlights:

Dry mill co-product production of distillers dried grains with solubles (DDGS) was 1.89 million tons during May 2015, up 12 percent from April 2015 and up 5 percent from March 2015. Distillers wet grains (DWG) 65 percent or more moisture was 1.23 million tons in May 2015, up 2 percent from April 2015 but down 3 percent from March 2015.

Wet mill corn gluten feed production was 350.1 thousand tons during May 2015, up 12 percent from April 2015 and up 6 percent from March 2015. Wet corn gluten feed 40 to 60 percent moisture was 325.3 thousand tons in May 2015, up 4 percent from April 2015 and up 5 percent from March 2015.

Co-products and Products Mar 2015 Apr 2015 May 2015
Dry Mill tons
Condensed distillers solubles (CDS-syrup) 163,713 139,930 148,637
Corn oil 107,141 102,610 118,281
Distillers dried grains (DDG) 438,728 411,664 418,448
Distillers dried grains with solubles (DDGS) 1,810,473 1,690,903 1,892,983
Modified distillers wet grains (DWG) <65% moisture 1,264,104 1,200,282 1,228,598
Modified distillers wet grains (DWG) 40-64% moisture 498,977 389,889 417,888
Wet Mill
Corn germ meal 57,439 61,922 69,135
Corn gluten feed 331,547 313,889 350,141
Corn gluten meal 93,078 89,356 97,295
Corn oil 42,684 42,998 53,208
Wet corn gluten feed 40-60% moisture 308,444 314,047 325,292

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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.)
7/03/15 98202 10083 1867 110152 5806553
7/10/15 97903 10053 1862 109817 5788904
7/17/15 96809 9940 1841 108590 5724191
7/24/15 95363 9859 1826 107047 5677126

*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

http://ncga.com/…

*Iowa Corn

http://www.iowacorn.org/…

Nebraska Corn Board

http://www.nebraskacorn.org/…

*Renewable Fuels Association - Ethanol Co-Products

http://www.ethanolrfa.org/…

*American Coalition for Ethanol

http://www.ethanol.org/…

*U.S. Grains Council

http://www.grains.org/…

*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

http://www.ddgs.umn.edu

*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

http://beef.unl.edu/…

*University of Nebraska Extension

http://ianrpubs.unl.edu/…

*Iowa Beef Center - Iowa State University

http://www.iowabeefcenter.org/…

*University of Missouri - Byproducts Resource Page

http://agebb.missouri.edu/…

*South Dakota State University - Dairy Science Department - Dairy cattle research

http://dairysci.sdstate.edu/…

(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 19th Annual Distillers Grains Symposium

The Distillers Grains Technology Council will hold its 19th Annual Distillers Grains Symposium on May 13-14, 2015 at the Sheraton Crown Center at Kansas City, Missouri. For information, contact the DGTC office at (515) 294-4019 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, or e-mail cheryl.anderson@dtn.com.

(CZ/SK)