DTN Weekly Distillers Grains Update

Fractionation, Processing Aids Top Symposium Topics

Advancements in developing new fractionated and higher value products from distillers grains into higher value products, and new ethanol processing aids such as antimicrobials, were the focus of a number of speakers at the recent Distillers Grains Technology Council's annual Distillers Grains Symposium Thursday in St. Louis.

Dr. Harold Tilstra, manager and ingredient merchandising technical support for Purina Animal Nutrition LLC (Land O'Lakes), spoke about the trend of fraction, the first being corn oil separation.

Tilstra described oil removal as "the biggest change in distillers grains in the last decade," however, the technology has become so popular that most ethanol plants currently operating now remove oil by use of a centrifuge. The oil becomes an additional source of revenue for ethanol plants and is usually sold for biodiesel production or as an addition to some animal feeds, especially for poultry rations.

Tilstra described a variety of nutrient enhancements and concentration technologies that are being incorporated by the industry, including fiber digestion/removal. Fiber digestion involves converting fiber into sugars to achieve higher ethanol production or to provide extra energy for poultry, and possible swine rations. Fiber is removed from the corn fiber either before or after fermentation. However, fiber removal may change the nutrient profile of the resulting distillers grains, possibly even improving nutrient availability.

Protein concentration/separation is another new fractionation technology coming to the forefront -- one that can add value to the resulting distillers grains as well.

Alfredo Dicostanza, professor of beef cattle nutrition and management from the University of Minnesota, spoke about high-protein DDG in livestock rations. He said that high-protein DDG is sold at a premium to corn and that feeders like that it has better consistency because of less intensive drying that is used. The bran removal used to produce high protein DDG can also significantly reduce mycotoxins. He added that although high-protein DDG is currently being produced and sold, it needs more trials and analysis.

Challenges facing the industry regarding new fractionated products include nutrient variation, overlap in commodity space, meeting existing product definitions, customer and nutritionist acceptance, and competition for storage space at feed mills, Tilstra said.

A panel of researchers spoke about a new project: an integrated C5-based platform for coproducts from DDG: David Timmons from Brown Forman Corporation, and Jagannadh Satyavolu, Michael Nantz and Christopher Burns, all from the University of Louisville. While other fractionation methods are being used to separate the oil, starch or protein, this technology uses the corn fiber from DDG to create two coproduct streams: one that is higher in protein and another that is higher in fat and digestibility energy. The technology can also be used to use other fractions of DDG to producer sweeteners and food coloring, biodegradable polymers, cyclic olefin polymers, and aviation fuels.

Another speaker, Joe Riley from Riley Resource Group, told conference attendees about new products made from distillers corn oil (DCO). He said technology has potential uses in both feed and fuel applications, and that corn oil use was predicted to more than triple by 2022.

So far, the DCO produced has varied significantly in quality and quantity, however, Corn Oil OneTM has a processing plant in Council Bluffs, Iowa, that is producing a ready-to-use, consistent corn oil product for both biodiesel and industrial applications. This product could potentially open up new feed markets as it is antibiotic free and meets standards for pet foods (equal to human food standards). However, generally recognized as safe (GRAS) and Kosher certifications would be essential for the product, Riley said. Uses for industrial markets could include paints, polymers and lubricants, as well as higher-end applications.

Riley predicted that DCO production per bushel will continue to grow. He added that product differentiation is key to unlocking new markets, and that improved quality is the key to adding value.

PROCESSING AIDS

The symposium also featured a New Product Panel with representatives from various companies who spoke on new antimicrobial agents and processing aids developed for ethanol production.

Two speakers highlighted new antimicrobials that their respective companies have developed, a timely topic amid growing public concern over antibiotic use/antibiotic residue in livestock feed.

Eric Summer spoke about new antimicrobials for the ethanol industry developed by his company: Anitox. The company has developed an antimicrobial that takes a proactive, rather than a reactive approach to control bacteria. The product (OptimOH) is antibiotic-free and residue-free, meets generally recognized as safe (GRAS) requirements, and is injected early in the process before bacteria have a chance to take hold.

Allen Ziegler, with the Hydrite company, told attendees about Defender, a new broad spectrum antimicrobial his company has developed. Defender is an antimicrobial agent that acts on cell membranes and cell cytoplasm. It is GRAS approved for animal feed up to 173 parts per million, is effective against both gram positive and gram negative bacteria, and is available in both solid and liquid forms. Hydrite is currently running trials on the product at ethanol plants.

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

Follow Cheryl Anderson on Twitter @CherylADTN

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NEWS IN BRIEF

Report Examines Economic Contributions of Grains, DDGS Exports

Exports of grains and co-products such as DDGS are adding huge benefits to the U.S. economy, according to a recent report.

By Cheryl Anderson

DTN Staff Reporter

The U.S. reaps great economic benefits from exports of grains and co-products, according to a recent report produced for the U.S. Grains Council in conjunction with the National Corn Growers Association (http://bit.ly/…).

This report was produced for the U.S. Grains Council (USGC) in coordination with National Corn Growers Association (NCGA) and examined the economic contributions provided by exports of barley, sorghum, corn, ethanol, dried distillers grains with solubles, corn gluten feed, and the corn equivalent of meat on the U.S. economy.

The report -- How Much Do Exports Matter? Evaluating the Economic Contributions of U.S. Grain Exports on State and Congressional District Economies -- emphasized the extra value grain exports provide to the economy.

"The results from this study indicate a total of $80 billion in economic output was generated from the $19.4 billion in grain exports that occurred during 2014. The GDP generated by these exports reached $32.9 billion and 371,536 full-time equivalent are supported by grain exports.

"For every one job directly supported by grain exports, and additional 6.8 jobs are supported throughout the U.S. economy. For every $1 of grain exports, the economic "ripple effects" add $3.23 to the economy, the report concluded.

According to statistics by the U.S. Department of Agriculture's Foreign Agricultural Service, U.S. exports of DDGS alone have grown tremendously in the past 10 years, from 1.3 million metric tons at a value of about $161 million in 2006, to about 13 mmt at a value of nearly $3 billion in 2015.

The report added that the benefits of growing grain exports extend beyond the agricultural industry, benefiting real estate, oil, natural gas, banking and financial industries, as well as restaurants, hospitals, employment services and wholesale trade industries.

The report concluded, "Realization of the importance of export markets to state and regional economies is the first step to fair and consistent access to international export markets for U.S. grain products. In turn, the economic impacts of grain exports will extend beyond the farmlands and benefit nearly all sectors of state and regional economies."

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

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DTN WEEKLY DDG SPOT PRICES

CURRENT PREVIOUS
COMPANY STATE 5/27/2016 5/20/2016 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $160 $135 $25
Modified $75 $65 $10
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $165 $155 $10
Indiana Dry $165 $150 $15
Iowa Dry $160 $145 $15
Michigan Dry $160 $150 $10
Minnesota Dry $140 $130 $10
North Dakota Dry $150 $135 $15
New York Dry $165 $155 $10
South Dakota Dry $140 $130 $10
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $145 $138 $7
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $155 $147 $8
Iowa Dry $150 $140 $10
Michigan Dry $145 $120 $25
Minnesota Dry $150 $130 $20
Missouri Dry $160 $148 $12
Ohio Dry $160 $147 $13
South Dakota Dry $150 $135 $15
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $135 $127 $8
Wet $40 $50 -$10
Illinois Dry $160 $140 $20
Nebraska Dry $135 $127 $8
Wet $40 $50 -$10
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $165 $150 $15
Indiana Dry $160 $145 $15
Iowa Dry $155 $135 $20
Michigan Dry $165 $145 $20
Minnesota Dry $150 $130 $20
Nebraska Dry $145 $135 $10
New York Dry $165 $165 $0
North Dakota Dry $145 $145 $0
Ohio Dry $165 $150 $15
South Dakota Dry $140 $135 $5
Wisconsin Dry $150 $135 $15
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $155 $145 $10
Iowa Dry $150 $135 $15
Minnesota Dry $145 $130 $15
Nebraska Dry $150 $140 $10
Ohio Dry $165 $150 $15
South Dakota Dry $140 $125 $15
Western Milling, Goshen, California (559-302-1074)
California Dry $220 $205 $15
*Prices listed per ton.
Weekly Average $152 $139 $13
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 5/26/2016 $4.0825 $145.80
Soybean Meal 5/26/2016 $409.60
DDG Weekly Average Spot Price $152.00
DDG Value Relative to: 5/13 5/13 5/6
Corn 104.25% 101.88% 94.90%
Soybean Meal 37.11% 38.50% 37.61%
Cost Per Unit of Protein:
DDG $6.08 $5.56 $5.04
Soybean Meal $8.62 $7.60 $7.05
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 (May 20, 2016)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 125.00-145.00 68.00-70.00 36.00-41.00
Minnesota 125.00-145.00 60.00 35.00-45.00
Nebraska 115.00-152.00 56.00-76.00 37.00-52.00
South Dakota 120.00-145.00 62.00-70.00 38.00-40.00
Wisconsin 130.00-145.00 62.00-70.00 NQ
Eastern Corn Belt 130.00-160.00 63.00-75.00 NQ
Kansas 130.00-170.00 NQ 47.00-54.00
Northern Missouri 135.00-156.00 65.00 43.00-44.00
DELIVERED PRICES PER TON
CIF NOLA 166.00-186.00
Pacific Northwest 198.00-210.00
California 188.00-203.00
Texas Border (metric ton) 192.00-215.00
Lethbridge AB 165.00
Chicago 155.00-172.00

Dried Distillers Grain: 10% Moisture

Modified Wet Distillers: 50-55% Moisture

Wet Distillers Grains: 65-70% Moisture

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue May 124, 2016)

Distillers Dry Grains

  Rail to California Points            210.00-217.00    up 13.00-7.00
  FOB Truck to California Points       210.00-220.00    unch-up 2.00

PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue May 24, 2016)

Offers for Distillers Dried Grains delivered by rail to feed mills in the Pacific Northwest were 18.00 to 35.00 higher from 216.00-230.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were also 18.00 to 35.00 higher from 234.00-245.00.

*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

February 2016 - March 2016

May 2, 2016

Highlights:

Dry mill co-product production of distillers dried grains with solubles (DDGS) was 1.92 million tons during March 2016, up 7 percent from February 2016 and up 8 percent from March 2015. Distillers wet grains (DWG) 65 percent or more moisture was 1.32 million tons in March 2016, up 6 percent from February 2016 but down 6 percent from March 2015.

Wet mill corn gluten feed production was 342.7 thousand tons during March 2016, up 10 percent from February 2016 and up 3 percent from March 2015. Wet corn gluten feed 40 to 60 percent moisture was 290.6 thousand tons in March 2016, up 5 percent from February 2016 but down 6 percent from March 2015.

Co-products and Products Mar 2015 Feb 2016 Mar 2016
Dry Mill tons
Condensed distillers solubles (CDS-syrup) 163,796 122,291 137,541
Corn oil 106,270 123,806 125,483
Distillers dried grains (DDG) 438,728 367,436 384,739
Distillers dried grains with solubles (DDGS) 1,781,563 1,795,472 1,919,507
Modified distillers wet grains (DWG) <65% moisture 1,399,125 1,247,751 1,317,118
Modified distillers wet grains (DWG) 40-64% moisture 494,835 401,370 456,256
Wet Mill
Corn germ meal 57,439 65,123 68,140
Corn gluten feed 331,547 312,012 342,668
Corn gluten meal 93,078 83,643 91,945
Corn oil 42,684 46,490 51,415
Wet corn gluten feed 40-60% moisture 308,444 277,434 290,565

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DDG LINKS/RESOURCES

National Organizations:

Distillers Grains Technology Council (www.distillersgrains.org)

Renewable Fuels Association (www.ethanolrfa.org)

U.S. Grains Council (www.grains.org)

National Corn Growers Association (www.ngfa.org)

American Feed Industry Association (www.afia.org)

Government/Regulatory:

National Grains and Feed Association (www.ngfa.org)

Association of American Feed Control Officials (www.aafco.org)

USDA Animal Feed Safety System (http://1.usa.gov/…)

USDA Food Safety Modernization Act (http://1.usa.gov/…)

University Websites:

Corn Processing Coproducts Manual, Nebraska Corn Board and Nebraska Corn Board and the University of Nebraska-Lincoln Institute of Agriculture and Natural Resources Agricultural Research Division Cooperative Extension Division (http://bit.ly/…)

University of Minnesota Biofuels Coproducts in Animal Feed (www.biofuelscoproducts.umn.edu)

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DDG CONFERENCES

*Distillers Grains Technology Council Inc.'s 20th Annual Distillers Grains Symposium

The Distillers Grains Technology Council will hold its 20th Annual Distillers Grains Symposium on May 18-19, 2016 at the Hyatt Regency at The Arch in St. Louis, 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.

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