Iowa Farmer Today
09-23-06
Ethanol industry growth boosts hog feed costs
By Jeff DeYoung, Iowa Farmer Today
ALTA -- Steve Turnquist says he’s not opposed to trying something new, so
when dry distillers grains became available at a local ethanol plant, he started
using them in his hog operation.
Three years later, the corn product is a large part of his Northwest Iowa farrowto-finish operation.
“It’s done pretty well for us,” says Turnquist, who farms with his brothers Dave
and Jon near here in Buena Vista County.
“We belong to the Quad County Corn Processors so we get a discount on the
distillers from the plant in Galva, so it has been cost effective as well.”
Turnquist starts implementing distillers into his ration when pigs reach 50
pounds, and uses it through finishing. Rations are balanced by a nutritionist, and
then feed is ground on the farm. Distillers comprise 10 percent of the total ration,
Turnquist says.
“We have the same consistency with feed, using an inclusion rate of 200 lbs.
distillers to the ton of feed,” he says.
But Turnquist and other hog producers could soon face stiff competition for corn
from the burgeoning ethanol industry in the Midwest, says Gary Allee, an animal
scientist at the University of Missouri-Columbia.
“We have developed a pig and poultry industry in this country based on feeding
corn and soybean meal,” he says. “In my opinion, that is about to change
because of our current energy policy.
“They (ethanol producers) may outbid us. We have entered into an era that
changes the situation because people are talking about corn and soybeans being
used as energy. This turns (livestock feeders’) world upside down.”
Allee says while ethanol byproducts such as corn gluten and wet distillers grains
make excellent feedstuffs for ruminant animals like cattle, pigs are limited in the
amount of dry distillers they can be fed.
“You can use a much higher percentage with cattle,” he says. “With pigs, once
you get past 20 percent, you run into some trouble.”
Allee says pigs have a problem digesting the higher amounts of fiber in dry
distillers. There are also protein deficiencies, such as too little lysine.
With more competition for corn, Allee believes it’s important that dry distillers be
produced to be more hog-friendly. He says corn can be pre-treated to remove the
germ and hull, reducing fat and fiber content.
“The pig has a unique need for corn, and in some areas we’ve gone from a corn
surplus to a corn deficit here in Missouri,” Allee says. “I’m just worried that once
the competition becomes stronger, will people just sell the corn and forget about
raising pigs.”
Supply and demand will also help determine corn prices down the road, says
Chad Hart, an ag economist with the Center for Agriculture and Rural
Development (CARD) at Iowa State University in Ames.
“As we ramp up ethanol production, it raises the price of what is in demand, and
that’s corn,” he says. “We are going to see higher prices for corn for any user,
whether it’s the livestock or ethanol industry.”
If it comes down to a bidding war, Hart says that situation may not bode well for
hog producers.
“The corn is going to go where it has the highest value, and right now ethanol is
the higher value,” he says. “Ethanol producers are going to be bidding to get the
corn wherever they can.”
Hart adds prices will be determined by several other factors, including ethanol
expansion, how the livestock industry adjusts to the competition and the
increased supply of ethanol byproducts, and how corn growers adjust to the
demand for more corn.
“If all the proposed plants come into production, it could push Iowa very close to
becoming a net importer of corn in a few years,” he says. “We are seeing interest
in ethanol nationwide, but with the demand for corn here, I think states that come
to Iowa looking for corn may not find it.”
While much of the ethanol byproduct will end up in cattle or dairy rations,
increased amounts could find its way into hog rations. Allee has researched the
benefits of dry distillers in hog rations, feeding amounts ranging from five to 40
percent of a total ration.
He says researchers found dry distillers could be fed up to 20 percent without
having a negative effect on performance.
“Dry distillers are not an ideal replacement for corn. It’s not a corn replacement,”
he says. “Even if you aggressively use 20 percent distillers, you are still going to
need about 60 percent corn. There are limitations to how you can use this
product in a swine diet.”
Allee says pigs do not seem to like the taste of dry distillers, reducing feed intake
in the first two to three weeks after pigs are introduced to the ration.
Turnquist says he is concerned about corn prices in his area, although he and his
brothers grow enough corn to satisfy their operation’s needs.
“The fact we can grow our own helps insulate us from higher corn prices,” he
says.
Turnquist expects competition for corn to strengthen as more ethanol plants
come on line.
“We still haven’t hit that point where the elevators are dedicating their corn to
ethanol plants, but with a large plant coming on line in Albert City, they are
saying we can’t grow enough corn in Buena Vista and Pocahontas Counties to
supply it,” he says.
“When you hear that, it really makes you think, and people are concerned about
what might happen with the price of corn.”