CattleNetwork.com, KS
10-18-06
Ethanol and Livestock - Management Issues and Resources
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:
http://www.ddgs.umn.edu/
Source: Brian Roe, Department of Agricultural, Environmental and Development
Economics and OSU Extension