1. Distillers Grains and Livestock Production
Presented by
John D. Lawrence
Iowa State University

2. 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

3. 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
Source: Shurson, U of MN

4. 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
Source: Shurson, U of MN

5. 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

6. 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

7. Estimated Feed Cost per Head Wean-Finish at $200/T SBM
$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
Corn Prices Scenarios
DDGS rate and Price

8. How Much Distiller’s Grains Can be Fed to Dairy Cows?
Recommend max. of ~ 20% of ration DM
lb/d of dried
lb/d of wet
Usually no palatability problems
At 30% of DM:
- May decrease DMI, especially if Wet CDG
- May feed excess protein
Source: Shurson, U of MN

9. 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
Source: Shurson, U of MN

10. 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#
Source: Garcia and Taylor, SDSU

11. Distillers Grains in Beef Cowherd and Feedlot Rations
John D. Lawrence, Director
Iowa Beef Center

12. Starch Removal Concentrates Other Nutrients
9/18/2018
Source: Dan Loy, ISU

13. Energy of Wet Distillers compared to Corn
Important: Fed at levels to meet protein requirement
Source: Dan Loy, ISU

14. 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

15. 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

16. 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

17. Feed Conversion in Three ISU Experiments where Wet and Dry DG were compared
5% Improvement
Fed at levels of 10-40% of ration.
Trenkle (1996, 1997, 2004)
9/18/2018
Source: Dan Loy, ISU

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
9/18/2018
Source: Dan Loy, ISU

19. Effect of level of feeding on energy value of Distillers grains
Feeding Value (%of Corn)
% Distillers Grains
Based Research at Midwest Universities
Almost 1% decrease in energy value fore each 1% increase in inclusion level (Nebraska analysis)
Source: Dan Loy, ISU

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
9/18/2018
Source: Dan Loy, ISU

21. 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
Source: Dan Loy, ISU

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
9/18/2018
Source: Dan Loy, ISU

23. Optimum Use Source: Dan Loy, ISU
At Plant
30 Miles
60 Miles
100 Miles
Optimum Use
Assume: 95% of corn price, $0.10/bushel increase corn price, costs covered, 153 days
from Vander Pol et. al. (2006 Nebraska Research Report)
Source: Dan Loy, ISU

24. Optimum Use Source: Dan Loy, ISU
At Plant
30 Miles
60 Miles
100 Miles
Optimum Use
Assume: 75% of corn price, $0.10/bushel increase corn price, costs covered, 153 days
(Calculated from 2006 U. of Nebraska Analysis)
Source: Dan Loy, ISU

25. 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?
Source: Dan Loy, ISU

26. 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

27. World Changing Again Rising beef demand Emphasis on quality grades
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

28. Estimated Returns to Feeding Yearling Steers in Iowa, 1996-2005 ($/head)
Average $28.54/head
$19.97
20%
62% of months positive
30% ROE

29. Fed Cattle Price by State
Average Fed Cattle Prices,
Average
Months price above Iowa
Texas
$68.73
60%
Colorado
$68.71
62%
Kansas
57%
Nebraska
$68.43
50%
Iowa
$68.52

30. Iowa’s Cattle Statistics

31. Feedlot Closeouts by Region
Source: Land O Lakes, Beef Feed “What Can We Learn”

33. 2004-06 Benchmark Close-outs
Region
Sex
Lots
Head
Carcasses
Central Plains
Heifers
18,032
2,458,299
1,069,072
Steers
18,759
2,565,051
940,443
High Plains
19,804
2,775,852
1,230,974
27,555
4,226,520
2,044,097
Midwest
2,341
340,290
65,189
5,437
805,458
131,572
North Plains
7,043
1,401,223
501,359
7,375
1,471,460
541,771

34. 2004-06 Benchmark Close-outs
In wt
Out wt
DOF
ADFI
ADG
F/G CP H
692
1,150
156
18.8
2.92
6.52 S
753
1,268
157
20.3
3.26
6.31 HP
652
1,132
178
17.9
2.68
6.72
705
1,250
180
19.1
3.02
6.38
Mid
751
1,205
158
21.3
2.85
7.56
792
1,320
165
22.3
3.18
7.10 NP
717
1,199
162
20.5
2.98
6.93
768
1,305
164
21.4
3.28
6.58

35. 2004-06 Benchmark Close-outs
COG VM
Death loss
HCW DP CP H
0.58
15.02
1.63
741
63.9 S
0.55
13.85
1.51
811
63.8 HP
0.60
15.40
1.77
728
64.0
0.56
13.27
1.62
801
Mid
13.12
1.30
763
63.4
0.51
13.28
1.29
836
63.7 NP
14.47
1.21
754
63.5
0.52
13.82
816

36. 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
1.6 S
0.5
5.4
41.6
5.7
4.6 HP
4.7
51.8
6.0
0.9
1.9
3.2
42.3
4.0
0.4
4.3
0.7
Mid
10.5
63.5
10.4
1.4
2.0
0.8
8.3
56.0
9.9
0.2 NP
1.5
57.2
9.4
8.6
49.2
0.3
5.9

37. 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

38. Matching Cattle to Coproduct
Plant capacity 45 million gallon
Gallons/Bu 2.65
DGS/Bu & DM 17 85%
DGS T/day & year ,340
Employees at plant
DM #/day 20
Percent of diet 15% 30% 40%
Head per day 224, ,044 84,033
Employees

39. 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

40. 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

41. 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

42. 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

43. Alternative Models Centralized feedlot Investor owned feedlot
Large scale (at least by Iowa standards)
Cattle may or may not be owned by company

44. 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?

45. 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

46. Any Questions? www.econ.iastate.edu/faculty/lawrence/
Thank you!
Any Questions?