Antibiotics and DDG

Expert: Antibiotic Regulations Do Not Apply to DDG

The Veterinary Feed Directive does not apply to the use of antimicrobials used in ethanol production, since ethanol coproducts are not medicated feeds. (DTN file photo by Cheryl Anderson)

OMAHA (DTN) -- With the Food Safety Modernization Act's new regulations on antibiotic use, a great deal of confusion exists about the use of antibiotics as an antimicrobial agent in ethanol production.

Richard Coulter, senior vice president for scientific and regulatory affairs for Phibro Animal Health, cleared up some of the misperceptions in a recent webcast.

The Food Safety Modernization Act is a significant initiative developed to ensure a strategic approach to managing risk in the food chain, Coulter said. It requires that producers evaluate potential risks in the food chain and develop strategies to identify, evaluate and rectify particular risks.

Since ethanol plants produce dried distillers grains, which are deemed by the FDA to be animal feed, ethanol plants are included in the list of facilities that must develop such a food safety plan.

"We see a lot of confusion at the moment with ethanol producers looking at adapting the Food Safety Modernization Act," Coulter said, especially in the use of antimicrobial agents used to control bacterial contamination in ethanol production.

Part of the reason behind the confusion is because of another initiative that involves veterinary medicines used for food animals.

A new veterinary drug initiative requires that after 2016, no antimicrobials may be used for food animals without the specific authorization of a veterinarian. However, the Veterinary Feed Directive does not apply to the use of antimicrobials used in ethanol production, since ethanol coproducts are not medicated feeds.

Since they make DDG that is considered animal feed, some ethanol producers believe they would potentially need a veterinarian to write them a prescription or a veterinarian feed directive to allow them to use antimicrobial products in ethanol.

"That is not true," Coulter said. "The two initiatives are entirely separate.

There are three approaches by which an anti-microbial production aid may be used in ethanol production, Coulter said.

First is the definition for DDG by the American Association of Feed Control Officials, which is very broad and does not prohibit, restrict or prevent the use of antimicrobials in the production of ethanol and DDG.

Secondly, plants could have an approved food additive petition, a mechanism which gives FDA approval to any microbial used in the ethanol production process.

The last way the product may be used legally is the generally-regarded-as-safe (GRAS) designation, which requires a scientific evaluation to ensure it does not constitute a hazard to animals that consume the feed or in any direct usages of the resulting DDG.

That third GRAS designation is the one that has allowed products such as Phibro's Lactrol to be used regularly in the ethanol industry for the last six to seven years.

Since corn coming into an ethanol plant arrives as a non-sterile material, it could bring undesirable bacteria into the ethanol production system. Anti-microbial products such as Lactrol help producers manage contamination in an ethanol fermentation system.

The majority of anti-microbial agents used in ethanol would be covered by GRAS, Coulter said. Such GRAS-approved products leave no unacceptable or dangerous residues that would persist in DDG and cause a hazard to animals or the foods they produce.

When analyzing hazards applying to ethanol plants, ethanol producers can state that the uses of Lactrol or other GRAS-approved antimicrobials are being used as directed as their hazard control strategy.

Coulter suggested that ethanol producers may want to ask their suppliers on what legal basis their antimicrobial production aid is marketed under.

"If they don't give the answer that it is marketed as a crude food additive or generally regarded as safe, then the producer probably shouldn't use that product because it potentially is not a legally marketed product," he said.

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

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IN THE NEWS

Gov. Proposes $5 Million to Expand Missouri Ports

Missouri Governor Jay Nixon has proposed a $5 million budget addition aimed at expanding Missouri's 14 ports along the Missouri River, according to an article by the St. Joseph News-Press (http://bit.ly/…).

Nearly $1 million of those funds would come to St. Joseph to construct a 20,000-square-foot hoop barn for dry bulk storage to hold fertilizer, as well as dried distillers grains and grains such as wheat, soybeans and corn.

The St. Joseph Regional Port Authority is trying to build St. Joseph's port to become a hub for shipping grain and DDG from the Midwest to Cuba. This growth would allow the port to ship large fertilizer shipments by barge and return trip using the same barges with grain or DDG.

The Port Authority is already in the final stages of completing a $1.2 million capital improvement project that adds a conveyer system, a winch system, paving along a rail spur and a second truck sale.

The improvement will allow the port to be more user-friendly and to be fully intermodal - handling both rail and truck freight as well.

Even though difficulties with the U.S. Army Corps of Engineers prevented the port from being open last year, Corps officials are guaranteeing a full spring navigation season with a nine-foot channel and hope for enough water by July 1 to continue into the fall.

In spite of the major improvements, experts predict it may take another year before a steady flow of barge traffic occurs at the St. Joseph port. The Port Authority Board is also hoping that Union Pacific will expand tracks at the port, as currently there is only enough track for about 10 freight cars at a time.

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

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DTN WEEKLY DDG SPOT PRICES

CURRENT PREVIOUS
COMPANY STATE 2/12/2016 2/5/2016 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $135 $135 $0
Modified $65 $65 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $145 $145 $0
Indiana Dry $137 $135 $2
Iowa Dry $125 $125 $0
Michigan Dry $135 $135 $0
Minnesota Dry $115 $115 $0
North Dakota Dry $125 $125 $0
New York Dry $165 $165 $0
South Dakota Dry $130 $130 $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $140 $140 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $135 $135 $0
Iowa Dry $122 $125 -$3
Michigan Dry $128 $126 $2
Minnesota Dry $119 $120 -$1
Missouri Dry $140 $140 $0
Ohio Dry $134 $136 -$2
South Dakota Dry $120 $120 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $130 $130 $0
Wet $50 $50 $0
Illinois Dry $145 $145 $0
Nebraska Dry $130 $130 $0
Wet $50 $50 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $145 $140 $5
Indiana Dry $135 $135 $0
Iowa Dry $120 $120 $0
Michigan Dry $130 $135 -$5
Minnesota Dry $120 $120 $0
Nebraska Dry $130 $130 $0
New York Dry $155 $150 $5
North Dakota Dry $125 $130 -$5
Ohio Dry $133 $137 -$4
South Dakota Dry $125 $125 $0
Wisconsin Dry $125 $125 $0
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $130 $130 $0
Iowa Dry $125 $125 $0
Minnesota Dry $120 $120 $0
Nebraska Dry $130 $130 $0
Ohio Dry $140 $140 $0
South Dakota Dry $115 $115 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $185 $185 $0
*Prices listed per ton.
Weekly Average $130 $130 $0
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 2/11/2016 $3.6025 $128.66
Soybean Meal 2/11/2016 $263.70
DDG Weekly Average Spot Price $130.00
DDG Value Relative to: 2/12 2/5 1/29
Corn 101.04% 98.78% 99.59%
Soybean Meal 49.30% 48.58% 48.71%
Cost Per Unit of Protein:
DDG $5.20 $5.20 $5.20
Soybean Meal $5.55 $5.63 $5.62
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 (Feb 5, 2016)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 115.00-127.00 55.00-65.00 37.00-41.00
Minnesota 115.00-120.00 60.00 36.00-45.00
Nebraska 125.00-140.00 58.00-80.00 49.00-55.00
South Dakota 115.00-129.00 62.00-69.00 40.00-44.00
Wisconsin 117.00-127.00 51.00-60.00 NQ
Eastern Corn Belt 126.00-140.00 62.00-67.00 NQ
Kansas 140.00-158.00 NQ 47.00-65.00
Northern Missouri 135.00-143.00 NQ 44.00-49.00
DELIVERED PRICES PER TON
CIF NOLA 155.00-162.00
Pacific Northwest 175.00-188.00
California 174.00-190.00
Texas Border (metric ton) 190.00-205.00
Lethbridge AB 152.00
Chicago 142.00-152.00

Dried Distillers Grain: 10% Moisture

Modified Wet Distillers: 50-55% Moisture

Wet Distillers Grains: 65-70% Moisture

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Feb 9, 2016)

Distillers Dry Grains

Rail to California Points Ltd 186.00 dn 9.00
 FOB Truck to California Points Ltd 185.00 unch-dn 13.00

PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue Feb 2, 2016)

Offers for Distillers Dried Grains delivered by rail to feed mills in the Pacific Northwest were steady to 9.00 higher from 182.00-187.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were steady to 9.00 higher from 200.00-202.00.

*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

November 2015 - December 2015

Feb. 1, 2016

Highlights:

Dry mill co-product production of distillers dried grains with solubles (DDGS) was 1.97 million tons during December 2015, up 2 percent from November 2015 and up 3 percent from December 2014. Distillers wet grains (DWG) 65 percent or more moisture was 1.27 million tons in December 2015, up 12 percent from November 2015 but down 10 percent from December 2014.

Wet mill corn gluten feed production was 340.5 thousand tons during December 2015, up 5 percent from November 2015 and up 3 percent from December 2014. Wet corn gluten feed 40 to 60 percent moisture was 307.9 thousand tons in December 2015, up 6 percent from November 2015 but down 9 percent from December 2014.

Co-products and Products Dec 2014 Nov 2015 Dec 2015
Dry Mill tons
Condensed distillers solubles (CDS-syrup) 172,082 124,855 134,196
Corn oil 97,380 130,938 131,811
Distillers dried grains (DDG) 448,551 413,019 423,632
Distillers dried grains with solubles (DDGS) 1,919,823 1,935,499 1,973,279
Modified distillers wet grains (DWG) <65% moisture 1,411,411 1,130,071 1,265,208
Modified distillers wet grains (DWG) 40-64% moisture 503,258 425,499 445,735
Wet Mill
Corn germ meal 75,031 67,645 69,669
Corn gluten feed 329,431 322,741 340,460
Corn gluten meal 94,777 84,505 88,921
Corn oil 44,551 53,597 57,578
Wet corn gluten feed 40-60% moisture 338,077 289,171 307,874

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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

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.

(SK/AG)