More ethanol plants will be coming to Ohio and to other livestock regions around the United States , which has led some to question how this will impact the livestock sector. While the ‘when’ and ‘where’ of additional Ohio ethanol plants are constantly evolving, livestock producers will have to deal with the fundamental fact – less corn will be available for feed while more ethanol byproducts will be available.
Over the next few months we will tackle several questions that have been surfacing about the emerging livestock-ethanol situation and update a set of links to resources that provide some of the most recent research on the topic.
Question: As the supply of ethanol co-products increases, how will that affect the price of the co-products?
John Lawrence, Iowa State University and director of the Iowa Beef Center , responds:
“There have been several examples of when co-product has been free for the hauling as new plants come on-line, dryers malfunction, or something is out of spec, but this is not a long run sustainable price. Economics suggests that as the supply of co-products out paces demand prices will be lower. What is the lower bound? It depends on alternative markets for the co-product. One alternative are other buyers including livestock production in other states and countries. The storage and long distant movement suggests that plants will have to dry the product with is costly at current natural gas prices. A second alternative is the co-product’s value as fuel for the plant. There is some price at which the plant is better off to burn DGS than sell it at too low of a price. Burning is likely to require additional investment into equipment and take time for plants to make that decision and get it installed. However, in the long run burning may set the lower price for DGS. A third alternative is to spread the DGS on the ground as fertilizer. There is some nitrogen and phosphorous value.”
For more information on ethanol by-products and the livestock sector, consider these links below:
Iowa Beef Center – Ethanol Co-Products for Cattle Feeding
http://www.iowabeefcenter.org/content/ethanol.htm
Illinois – Using Illinois By-Product Feeds in Livestock Feeding Programs
http://ilift.traill.uiuc.edu/distillers/index.cfm
Missouri – By-Products Links for Dairy Producers
http://agebb.missouri.edu/dairy/byprod/index.htm
National Corn Growers’ Association Distilled Grain Feeding Recommendations – All species
http://www.ncga.com/ethanol/pdfs/111005DGFeedingRecommendations.pdf
Wisconsin – Ethanol Co-Products and Dairy
http://www.das.psu.edu/dairynutrition/documents/shaverdistillppt.pdf
Minnesota Distillers Grain Byproducts in Livestock Feed Resources Page