distillers grains and livestock production

Distillers Grains and Distillers Grains and Livestock ProductionLivestock Production

Presented by

John D. LawrenceIowa State University

Benefits of Using DDGS in Swine Diets

• Often an economical partial replacement for:– corn– soybean meal– dicalcium phosphate

• Large supply available where hogs are produced• Unique properties

– reduce P excretion in manure– increase litter size weaned/sow– gut health benefits

Source: Shurson, U of MN

Maximum Inclusion Rates of “New Generation” DDGS in Swine Diets

(Based Upon University of Minnesota Performance Trials)• Nursery pigs (> 7 kg)

– Up to 25 % • Grow-finish pigs

– Up to 20% (higher levels may reduce pork fat quality)

• Gestating sows– Up to 50%

• Lactating sows– Up to 20%

Assumptions: no mycotoxins, formulate on a digestible amino acid and available phosphorus basis


Current DDGS Feeding Practices• Used almost exclusively in grow-finish diets

– 10% inclusion most common• Gut health benefits frequently observed

– Up to15 to 20% inclusion• When competitively priced• Need to supplement with synthetic amino acids

• Limited use in sow feeds– Perceived risk of mycotoxins– 10% inclusion when used

• Limited use in nursery feeds– Lower amino acid content/nutrient density vs other

ingredients• Limited formulation space in high nutrient dense diets

– 5% inclusion when used


Challenges or Concerns• Must be golden brown

–Dark brown is over heated and ties up lysine• Flow ability• Pellet quality• Another bin for storage• Abrupt changes may put pigs off feed

Estimated Feed Cost per Head Wean-Finish, No DDGS

SBM $/T $1.50 $2.00 $2.50 $3.00 $3.50 $4.00

$150 40.80 45.65 50.50 55.35 60.20 65.05$175 42.18 47.03 51.88 56.73 61.58 66.43$200 43.55 48.40 53.25 58.10 62.95 67.80$225 44.93 49.78 54.63 59.48 64.33 69.18$250 46.30 51.15 56.00 60.85 65.70 70.55$275 47.68 52.53 57.38 62.23 67.08 71.93$300 49.05 53.90 58.75 63.60 68.45 73.30

Corn Price

9.7 Bushels of corn, 110 pounds of 48% SBM, $18/head other costs

Estimated Feed Cost per Head Wean-Finish at $200/T SBM

Corn Prices ScenariosDDGS rate and Price $1.50 $2.00 $2.50 $3.00 $3.50 $4.00

No DDGS 43.55 48.40 53.25 58.10 62.95 67.80

10% $90 43.65 48.03 52.40 56.78 61.15 65.52

10% $80 43.32 47.70 52.07 56.44 60.82 65.19

10% $70 42.99 47.36 51.74 56.11 60.48 64.86

20% $90 43.75 47.66 51.57 55.47 59.38 63.29

20% $80 43.09 47.00 50.91 54.81 58.72 62.63

20% $70 42.43 46.34 50.25 54.15 58.06 61.97

How Much Distiller’s Grains Can be Fed to Dairy Cows?

Recommend max. of ~ 20% of ration DM- 10-13 lb/d of dried- 30-40 lb/d of wet

Usually no palatability problemsAt 30% of DM:

- May decrease DMI, especially if Wet CDG- May feed excess protein


Example Ration Considerations for Dairy Cattle

Diets containing 50:50 forage:concentrate- If equal proportions of alfalfa & corn silage• DG can replace most or all protein supplement

- If mostly corn silage• More DG can be fed but may need some other protein

supplement (check Lysine and P levels)- If mostly alfalfa• Less DG likely needed to supply diet CP


Dairy Ration Economics• Assuming: $2.30 corn, $185 SBM, $25 corn

silage, $45 alfalfa haylage, Limestone $7.25/cwt, DiCal $20/cwt, & $90 DGS

• Feed cost/day/cow at 3 production levels%DGS 16,000# 20,000# 24,000#0 1.88 2.17 2.4510 1.76 2.06 2.3520 1.68 1.96 2.2430 1.68 1.92 2.16

Source: Garcia and Taylor, SDSU

Distillers Grains in Beef Cowherd and Feedlot Rations

John D. Lawrence, DirectorIowa Beef Center

04/22/23 12

Starch Removal Concentrates Other Nutrients

0

100

200

300

400

500

Protein

ND

F

Starch

Fat

P K S

Nutrient

% o

f Cor

n G

rain

CGFDGS

Source: Dan Loy, ISU

Energy of Wet Distillers compared to Corn

Reference Location % of corn

Comments

Larson et al (1993) Nebraska 120-130 Calves Larson et al (1993) Nebraska 150-180 Yearlings Ham et al Nebraska 120-140 5 studies Lodge et al (1995) Nebraska 96-102 Sorghum Trenkle (1996) Iowa State 150 Trenkle (1997) Iowa State 150-180 Steers Trenkle (1997) Iowa State 150 Heifers Fanning et al (1999) Nebraska 134 C/S

Important: Fed at levels to meet protein requirement


DGS and Cowherds

• High protein and energy• Complements low quality forage

such as cornstalks very well• Dry DGS can be expensive• Wet DGS has storage challenge• Syrup mixed with ground stalks

DGS and Cowherds• Potential uses

– Fed on pasture to stretch grass– Fed on stalks for energy and protein– Feed TMR with tub-ground stalks– Bag or bunker with tub-ground stalks– Creep and weaning ration of calves

• Early weaning or stressed calves because of high feed value of DDGS

DGS and Cowherds

• Current projects– Stocker cattle on grass with self-feeder– Developing a pellet/cube with soy hulls

and DDGS to feed on pasture or stalks– Evaluating storage methods

04/22/23 17

Feed Conversion in Three ISU Experiments where Wet and Dry

DG were compared6 5.72

0

1

2

3

4

5

6

DDG WDG

Trenkle (1996, 1997, 2004)

5% Improvement

Fed at levels of 10-40% of ration.


04/22/23 18

Plains research with corn coproducts

• A recent summary by Cole et al (2006 Plains Nutrition Conference) of research from the Southern Plains found:– As little as 10% added distillers grains reduced

performance in steam-flaked corn based rations– Milo distillers grains is similar to lower in energy

compared to corn DG– Corn gluten feed is popular and successful in these

rations


Feed

ing

Valu

e (%

of C

orn)

050

100

150

0 10 20 30 40 50% Distillers Grains

Based Research at Midwest Universities

Almost 1% decrease in energy value fore each 1% increase in inclusion level (Nebraska analysis)

Effect of level of feeding on energy value of Distillers grains


04/22/23 20

Evaluation of a low protein, high bran coproduct of ethanol production

0% DBRAN

15% DBRAN

30% DBRAN

45% DBRAN

30% DDGS

DMI 25.1 26.8 27.1 26.9 26.3

ADG 3.76 4.02 4.10 4.27 4.01

F/G 6.74 6.72 6.68 6.37 6.62

Calculated NE (% of corn

-- 98 101 108 102

Nebraska (2006)—Dakota Bran Cake


Challenges• Storage and handling is more costly• High levels of feeding management

is required– Bunk management and mixing– Nutrient balances

• Nutrient (manure) management is more costly


04/22/23 22

Summary of Important Facts about Ethanol Coproducts

• Distillers grains are superior nutritionally to corn grain• Wet distillers grain are superior to dry distillers grains• Ethanol coproducts work best in Upper Midwest Feeding

situations• High levels of distillers grains can be fed if economics

dictate• You can add value to distillers grains and still produce

high quality cattle feed• Challenges in feeding ethanol coproducts are manageable• Economics will drive use and inclusion levels


Optimum Use

-5

0

5

10

15

20

25

30

0 10 20 30 40 50

WDGS Inclusion, % of DM

$/hd

abo

ve 0

% W

DGS

per 1

53 d

Assume: 95% of corn price, $0.10/bushel increase corn price, costs covered, 153 days from Vander Pol et. al. (2006 Nebraska Research Report)

At Plant

30 Miles

60 Miles

100 Miles


Optimum Use

-5

0

5

10

15

20

25

30

35

40

0 10 20 30 40 50

WDGS Inclusion, % of DM

$/hd

abo

ve 0

% W

DG

S pe

r 153

d

Assume: 75% of corn price, $0.10/bushel increase corn price, costs covered, 153 days(Calculated from 2006 U. of Nebraska Analysis)

At Plant

30 Miles

60 Miles

100 Miles


What we need to know about ethanol coproducts

• How much can we feed? • How different are the nutritional

properties of specific coproducts (low oil, low protein, modified moisture, mixtures)

• Are there feed combinations that work best?

• Can variation in some nutrients be reduced?


Iowa Was #1 in Beef♦ 1968-1972 #1 in fed cattle marketing

♦ Over 4 million fed cattle per year♦ 18% of the US total

♦ The world changed♦ Technology♦ Economies of scale♦ Irrigation♦ Clean Water Act♦ Emphasis on lean beef♦ Falling consumer demand

♦ Currently 1.5 million marketings

World Changing Again♦ Rising beef demand

♦ Up more than 20% since 1998♦ Emphasis on quality grades

♦ Choice-Select spread 2x in 15 years♦ Movement from commodity to products

♦ Predictability, traceability, and integrity♦ Cost structure shift

♦ Coproduct surplus♦ Higher energy prices

Estimated Returns to Feeding Yearling Steers in Iowa, 1996-2005 ($/head)

$(200)

$(100)

$-

$100

$200

$300

$400

$500Average $28.54/head

62% of months positive

30% ROE

$19.97

20%

Fed Cattle Price by State

AverageMonths price above Iowa

Texas $68.73 60%Colorado $68.71 62%Kansas $68.71 57%Nebraska $68.43 50%Iowa $68.52

Average Fed Cattle Prices, 1994-2003

Iowa’s Cattle StatisticsAverage Corn Price, 1991-2004

$2.00

$2.10

$2.20

$2.30

$2.40

$2.50

$2.60

$2.70

Feedlot Closeouts by Region

Source: Land O Lakes, Beef Feed “What Can We Learn”

2004-06 Benchmark Close-outsRegion Sex Lots Head CarcassesCentral Plains Heifers 18,032 2,458,299 1,069,072Central Plains Steers 18,759 2,565,051 940,443

High Plains Heifers 19,804 2,775,852 1,230,974High Plains Steers 27,555 4,226,520 2,044,097

Midwest Heifers 2,341 340,290 65,189Midwest Steers 5,437 805,458 131,572

North Plains Heifers 7,043 1,401,223 501,359North Plains Steers 7,375 1,471,460 541,771

2004-06 Benchmark Close-outsIn wt Out wt DOF ADFI ADG F/G

CP H 692 1,150 156 18.8 2.92 6.52CP S 753 1,268 157 20.3 3.26 6.31

HP H 652 1,132 178 17.9 2.68 6.72HP S 705 1,250 180 19.1 3.02 6.38

Mid H 751 1,205 158 21.3 2.85 7.56Mid S 792 1,320 165 22.3 3.18 7.10

NP H 717 1,199 162 20.5 2.98 6.93NP S 768 1,305 164 21.4 3.28 6.58

2004-06 Benchmark Close-outsCOG VM Death loss HCW DP

CP H 0.58 15.02 1.63 741 63.9CP S 0.55 13.85 1.51 811 63.8

HP H 0.60 15.40 1.77 728 64.0HP S 0.56 13.27 1.62 801 63.9

Mid H 0.55 13.12 1.30 763 63.4Mid S 0.51 13.28 1.29 836 63.7

NP H 0.55 14.47 1.21 754 63.5NP S 0.52 13.82 1.29 816 63.5

2004-06 Benchmark Close-outsPr CAB Ch YG4 YG5 Hvy Lt

CP H 1.3 7.7 51.3 8.5 1.0 0.6 1.6CP S 0.5 5.4 41.6 5.7 0.6 4.6 0.5

HP H 1.3 4.7 51.8 6.0 0.9 0.6 1.9HP S 0.6 3.2 42.3 4.0 0.4 4.3 0.7

Mid H 3.2 10.5 63.5 10.4 1.4 2.0 0.8Mid S 1.4 8.3 56.0 8.5 0.9 9.9 0.2

NP H 1.5 10.5 57.2 9.4 0.9 1.4 0.7NP S 0.7 8.6 49.2 5.7 0.3 5.9 0.4

The World has Changed, but What is Really Different?

• Iowa has always been a low feed cost region• There are no new packers in Iowa• Water issues in High Plains• Large professional feedlots are established

in other regions and have customer base• Iowa has new feedlot permitting rules

Matching Cattle to CoproductPlant capacity 45 million gallonGallons/Bu 2.65DGS/Bu & DM 1785%DGS T/day & year 395 144,340 Employees at plant 30-35DM #/day 20Percent of diet 15%30% 40%Head per day 224,089112,04484,033Employees 12462 47

Why Iowa, Why Now?• Is Iowa competitive in cattle feeding?• What is YOUR business model and how

will YOU beat out the competition?– The existing businesses won’t roll over– How will you bid cattle away from them?– How will you attract AND KEEP customers

Alternative Models• Farmer feeder expansion

–Leverage existing resources and skills–Low interest loans to upgrade and expand

AFO–What comes first crops or cattle?–Large enough for a specialist?–Hire professionals where needed

Alternative Models• Keep full agreement to encourage

expansion– Plant owns or partners on cattle in locally

owned feedlots– Guarantees X head days a year to help

producer secure financing to expand– Feedlot guarantees a market for co-products

Alternative Models• Centralized capital/cattle management

– Commercial feeding and professional services– Professional management and marketing– Multiple feedyards, existing or new– Central company may be owned by feedlots, ethanol

plant, local investors, or independent– May own cattle as well as manage– Provide a method for local investment in cattle

Alternative Models

• Centralized feedlot– Investor owned feedlot– Large scale (at least by Iowa

standards)– Cattle may or may not be owned

by company

Am I Competitive Feeding Cattle in Iowa?

• Ethanol expansion has changed economics– Iowa’s low cost of gain advantage grows– Corn prices are expected to be higher in the

future, but cost of gain cheaper• Cheap gain is an opportunity not a guarantee

– How will you capture the opportunity?– What resources and assistance do you need?

Summary• Hogs: impact depends on price of DDGS

relative to corn and SBM• Dairy: likely benefit from DGS and can

use wet or dry• Beef feedlot: clearly benefits from

WDGS• Cowherds: Competition for pasture

from corn, more stalks available, and DGS can help lower feed cost

Thank you!Any Questions?

www.econ.iastate.edu/faculty/lawrence/

distillers grains and livestock production

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