DTN Weekly Distillers Grains Update
Lower Winter Ration Costs by Replacing Hay With Corn, Co-products
DAVENPORT, Neb. (DTN) -- Beef producers may lower the cost of winter feed rations by replacing hay with lower-cost corn and corn co-products.
Commodity prices have taken a tumble in recent months, as have corn and corn-derived feeds such as distillers grains. Hay and forage prices have fallen somewhat, but not to the same degree, according to Warren Rusche, extension cow/calf specialist at South Dakota State University in Watertown, S.D.
The comparative stability in hay prices is not entirely due to supply, Rusche said, although there has been some decrease in alfalfa and grass hay acres in recent years. He said part of the reason hay prices are not declining as much as grain is that hay producers still remember 2011 when a lot of hay from South Dakota was shipped south because of drought. The next year, South Dakota producers found themselves with a supply shortage because they sold off so much hay.
"I suspect part of the mindset right now, at least in South Dakota, is that people who found themselves in that situation are doing whatever they need to do to make sure it never happens to them again," Rusche said.
With corn being a more concentrated source of energy than hay, Rusche set about to explore differences in hay and corn/DDG prices by formulating three different rations for 1,400 pound cows in late gestation that were designed to meet protein requirements and maintain body condition. The rations were based on published price data from South Dakota feed markets in early October:
-Ration 1: A traditional hay- based diet using alfalfa hay (19% crude protein) and grass hay (7 percent CP).
-Ration 2: A limit-fed diet consisting of corn silage, grass hay and modified distillers grains.
-Ration 3: A limit-fed diet using grass hay combined with corn and MDG.
Rusche said he used modified distillers grains simply because that is the most popular form of distillers grain sold in his area, although he added that with some simple adjustments in the numbers wet, modified or dried distillers can be used.
Out of the three rations, Ration 3 using the least amount of hay was the least-cost ration (see table).
| Feedstuff | Price | Ration #1 | Ration #2 | Ration #3 |
| Corn grain | $2.70/bushel | 6 | ||
| Alfalfa Hay | $120/ton | 5 | ||
| Grass Hay | $80/ton | 25 | 15 | 12 |
| Corn silage | $28/ton | 12 | ||
| Modified Distillers | $48/ton | 8 | 6 | |
| Feed Cost Per Day | $1.34 | $0.96 | $0.91 |
*By Warren Rusche, SDSU Extension Cow/Calf Field Specialist. Courtesy iGrow.org
In this situation, if you can manage a limit-fed program, you can achieve about a 40-cent difference in cost per day by using corn and corn co-products, he said.
That has not always been the case, Rusche said, remembering that a year ago, distillers grains prices were so high that nutritionists were telling producers to only use the bare minimum of distillers needed to meet supplemental protein requirements.
"Distillers wasn't the good buy as it had been in past years," he said. "That shows just how much things change, what was the right answer a year ago is not necessarily the right answer now."
Producers do need to keep in mind a number of variables, Rusche pointed out. First, Ration 2 and 3 both depend on the producers' ability to deliver a set amount of feed per day to cattle to limit how much they can eat. If unable to do that, producers might need to consider different options, such as giving cattle free access to cornstalk bales, supplemented with distillers grains.
Of course the recent snow has closed the door on getting cornstalks baled for some producers, so some may need to remain with traditional hay as the feed method of choice.
There are other considerations as well. First, limit-feeding requires a certain amount of manpower and equipment, as well as sufficient bunk space to prevent cows lower on the pecking order from not getting insufficient nutrition. The guideline, Rusche said, is to allow 30 inches of bunk space per cow.
Strong, sturdy fencing is also vital if undertaking a limit-fed situation. Cows will always consume more feed than offered in limit-fed situations, if given free choice. They are often unhappy if their appetites are not satisfied and will look for ways to find more food.
Other strategies in implementing limit-fed rations include:
-Basing diets on actual nutrient analyses.
-Measuring or closely estimating body weight of cows in order to accurately formulate rations and prevent nutrition deficiencies.
-Gradually adapting cattle to diet changes, especially if using high-starch diets.
-Keeping in mind that colder winter weather will increase nutrient requirements.
Producers also need to keep in mind that local hay, corn and distillers prices, local basis levels and the producer's proximity to an ethanol plant will all play a role in what is the best option of rations for each producer.
"Work with a nutritionist or an extension specialist for what will work best for your farm or ranch," he suggested. "Take everything into consideration and go through all your options."
Rusche warned producers against falling into the trap of thinking, "This is the way I've always fed my cattle and this is the way I will continue."
"We need to adapt to changing market conditions," he said. "Right now the market is pointing us toward corn and corn-based co-products. So that needs to be on producers' radar screens to allow them to meet nutrient requirements at the best possible costs.
"The corn sector is providing us with some real opportunities, and we have to figure out how to incorporate those into our feed programs," he said.
Cheryl Anderson can be reached at cheryl.anderson@dtn.com.
-----------------------------------------------------------------------
IN THE NEWS
FSMA Preventative Control Rule Will Have Biggest Effect on Ethanol Plants
A lot of rules and requirements are in store for ethanol plant with the new Food Safety Modernization Act; however the one most likely to have the biggest effect on ethanol will be the preventative control rule, according to Andrew Anderson, partner at Faegre Baker Daniels, in an article written for Ethanol Producer magazine (http://bit.ly/…).
The new act will impose a myriad of new requirements on any facility that produces animal feed, including ethanol plants that produce animal feeds such as distillers grains or corn gluten feed. Ethanol plants will need to employ outside technical experts, as a qualified individual is required for compliance for some of the steps.
Anderson advises in the article that there are two components of the preventative control rule that ethanol producers need to be aware of: hazard analysis and preventive controls and Current Good Manufacturing Practices (CGMP). Both are part of the required written food safety plan that plants must implement and maintain.
The hazard analysis and preventive controls section stipulates requirements for plants such as: hazard analyses for feed safety hazards, preventive control to minimize hazards, monitoring the preventive controls and verifying they are working, and maintaining a food safety plan.
The CGMP requirements covers areas of the plant's food safety system, such as hygienic practices, waste disposal, ventilation, pest control, procedures to prevent contamination, cleaning, etc. Also important is a rule that requires plants to protect animal food stored outdoors by any means, including using protective covers, and checking for an eliminating conditions conducive to pest infestation (birds, rodents, insects, etc.).
The Food and Drug Administration will release a final preventive control rule for animal feed rule by Aug. 30, 2015, then plants will have one year to comply. Anderson recommends that plants begin working with technical experts, well before the 2016 compliance deadline.
Egyptian Feed Buyers Learn From Nebraska Farmers
The U.S. Grains Council recently escorted a team of feed buyers that toured Nebraska and talked with Nebraska farmers, according to an article on the Council's website (http://bit.ly/…).
In 2013, Egypt rebounded as a major market for imports of U.S. corn and corn co-products, such as dried distillers grains with solubles and corn gluten meal.
According to the USDA's Foreign Agricultural Service, Egypt imported a total of 97,295 million metric tons of DDGS at a value of about $29 million in 2012. By 2013, Egypt's DDGS imports grew to nearly 114,000 mmt at a value of about $37 million.
Egypt's imports continue to grow. Between January and September 2013, Egypt purchased more than 97,000 mmt tons of DDGS at a value of about $32 million. During the same time period in 2014, those numbers grew to nearly 140,000 mmt of DDGS at a value of about $38 million.
The Egyptian team had the opportunity to learn information about U.S. corn and corn co-products by talking directly with Nebraska producers.
USGC Regional Director of the Middle East and Africa Cary Sifferath said, "Those types of questions and answers between the large buyers in Egypt and the U.S. corn producers are really key to being able to sell U.S. feed grains to Egypt."
The Council plans to continue its efforts to expand Egypt's demand for U.S. corn and corn co-products this year, as well as in the future.
Cheryl Anderson can be reached at cheryl.anderson@dtn.com.
-----------------------------------------------------------------------
DTN WEEKLY DDG SPOT PRICES
| CURRENT | PREVIOUS | ||||
| COMPANY | STATE | 11/21/2014 | 11/14/2014 | CHANGE | |
| Bartlett and Company, Kansas City, MO (816-753-6300) | |||||
| Missouri | Dry | $128 | $125 | $3 | |
| Modified | $70 | $67 | $3 | ||
| CHS, Minneapolis, MN (800-769-1066) | |||||
| Illinois | Dry | $110 | $110 | $0 | |
| Indiana | Dry | $105 | $115 | -$10 | |
| Iowa | Dry | $100 | $110 | -$10 | |
| Michigan | Dry | $115 | $115 | $0 | |
| Minnesota | Dry | $95 | $95 | $0 | |
| North Dakota | Dry | $110 | $100 | $10 | |
| New York | Dry | $130 | $130 | $0 | |
| South Dakota | Dry | $105 | $110 | -$5 | |
| Hawkeye Gold, IA (515-663-6413) | |||||
| Iowa | Dry | $115 | $110 | $5 | |
| Modified | $45 | $50 | -$5 | ||
| MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) | |||||
| Kansas | Dry | $120 | $120 | $0 | |
| POET Nutrition, Sioux Falls, SD (888-327-8799) | |||||
| Indiana | Dry | $110 | $105 | $5 | |
| Iowa | Dry | $104 | $98 | $6 | |
| Michigan | Dry | $115 | $115 | $0 | |
| Minnesota | Dry | $100 | $96 | $4 | |
| Missouri | Dry | $126 | $118 | $8 | |
| Ohio | Dry | $116 | $112 | $4 | |
| South Dakota | Dry | $112 | $105 | $7 | |
| United BioEnergy, Wichita, KS (316-616-3521) | |||||
| Kansas | Dry | $120 | $120 | $0 | |
| Wet | $45 | $45 | $0 | ||
| Illinois | Dry | $130 | $125 | $5 | |
| Nebraska | Dry | $120 | $120 | $0 | |
| Wet | $45 | $45 | $0 | ||
| U.S. Commodities, Minneapolis, MN (888-293-1640) | |||||
| Illinois | Dry | $110 | $110 | $0 | |
| Indiana | Dry | $110 | $110 | $0 | |
| Iowa | Dry | $107 | $105 | $2 | |
| Michigan | Dry | $112 | $110 | $2 | |
| Minnesota | Dry | $97 | $100 | -$3 | |
| Nebraska | Dry | $120 | $115 | $5 | |
| New York | Dry | $165 | $165 | $0 | |
| North Dakota | Dry | $120 | $115 | $5 | |
| Ohio | Dry | $115 | $115 | $0 | |
| South Dakota | Dry | $105 | $110 | -$5 | |
| Wisconsin | Dry | $100 | $95 | $5 | |
| Valero Energy Corp., San Antonio, TX (402-727-5300) | |||||
| Indiana | Dry | $115 | $110 | $5 | |
| Iowa | Dry | $115 | $115 | $0 | |
| Minnesota | Dry | $110 | $110 | $0 | |
| Nebraska | Dry | $125 | $125 | $0 | |
| Ohio | Dry | $115 | $115 | $0 | |
| South Dakota | Dry | $110 | $110 | $0 | |
| Western Milling, Goshen, California (559-302-1074) | |||||
| California | Dry | $210 | $210 | $0 | |
| *Prices listed per ton. | |||||
| Weekly Average | $112 | $111 | $1 | ||
| The weekly average prices above reflect only those companies DTN | |||||
| collects spot prices from. States include: Missouri, Iowa, Nebraska, | |||||
| Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan, | |||||
| Wisconsin and Indiana. Prices for Pennsylvania, New York and | |||||
| California are not included in the averages. | |||||
*The spot prices gathered by DTN are only intended to reflect general market trends and may vary. Please contact individual plant or merchandiser for exact prices.
If you would be willing to take a weekly phone call and have your distiller grains spot prices listed in this feature, please contact Cheryl Anderson at (308) 224-1527 or (800) 369-7875, or e-mail cheryl.anderson@dtn.com.
-----------------------------------------------------------------------
| VALUE OF DDG VS. CORN & SOYBEAN MEAL | ||||
| Settlement Price: | Quote Date | Bushel | Short Ton | |
| Corn | 11/20/2014 | $3.7325 | $133.30 | |
| Soybean Meal | 11/20/2014 | $370.80 | ||
| DDG Weekly Average Spot Price | $112.00 | |||
| DDG Value Relative to: | 11/21 | 11/14 | 11/7 | |
| Corn | 84.02% | 80.47% | 78.44% | |
| Soybean Meal | 30.20% | 28.21% | 26.55% | |
| Cost Per Unit of Protein: | ||||
| DDG | $4.48 | $4.44 | $4.16 | |
| Soybean Meal | $7.81 | $8.28 | $8.25 | |
| Notes: | ||||
| Corn and soybean prices taken from DTN Market Quotes. DDG | ||||
| price represents the average spot price from Midwest | ||||
| companies collected on Thursday afternoons. Soybean meal | ||||
| cost per unit of protein is cost per ton divided by 47.5. | ||||
| DDG cost per unit of protein is cost per ton divided by 25. | ||||
-----------------------------------------------------------------------
USDA MARKET NEWS/DISTILLER GRAINS PRICES
USDA WEEKLY DISTILLERS GRAINS SUMMARY (Nov 14, 2014)
| Dried | Modified | Wet | |
| FOB PLANT PRICES PER TON | |||
| Iowa | 97.00-131.00 | 45.00-50.00 | 24.00-34.00 |
| Minnesota | 90.00-115.00 | 40.00 | 40.00 |
| Nebraska | 100.00-130.00 | 50.00-68.00 | 39.00-50.00 |
| South Dakota | 92.00-105.50 | 47.00-60.50 | 26.00-28.00 |
| Wisconsin | 100.00-110.00 | 43.00-50.00 | NQ |
| Eastern Corn Belt | 95.00-140.00 | 45.00-53.00 | NQ |
| Kansas | 115.00-145.00 | NQ | 40.00-52.00 |
| Northern Missouri | 110.00-125.00 | NQ | 35.00-38.00 |
| DELIVERED PRICES PER TON | |||
| CIF NOLA | 168.00-182.00 | ||
| Pacific Northwest | 195.00-209.00 | ||
| California | 191.00-206.00 | ||
| Texas Border (metric ton) | 210.00-230.00 | ||
| Lethbridge AB | 180.00 | ||
| Chicago | 120.00-138.00 | ||
Dried Distillers Grain: 10% Moisture
Modified Wet Distillers: 50-55% Moisture
Wet Distillers Grains: 65-70% Moisture
CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Nov 18, 2014)
Distillers Dry Grains
Rail to California Points 197.00-207.00 up 12.00-unch
FOB Truck to California Points 205.00-218.00 up 10.00-8.00
PACIFIC NORTHWEST WEEKLY FEED (Tue Nov 18, 2014)
Offers for Distillers Dried Grains delivered in September by rail to feed mills in the Pacific Northwest were steady to 8.00 higher from 203.00-208.00. Offers for distillers dried grains trans-loaded onto trucks and delivered during September to Willamette Valley dairies were also steady to 8.00 higher from 221.00-223.00.
*All prices quoted per ton unless otherwise noted.
-----------------------------------------------------------------------
RFA WEEKLY U.S. LIVESTOCK FEED PRODUCTION
| CO-PRODUCT OUTPUTS (metric tons) | |||||
| Week Ending | Distillers Grains | Corn Gluten Feed | Corn Gluten Meal | Total Feed | Corn Oil (lbs.) |
| 10/17/14 | 88544 | 9154 | 1695 | 99393 | 5271197 |
| 10/24/14 | 92596 | 9572 | 1773 | 103941 | 5512401 |
| 10/31/14 | 91805 | 9491 | 1758 | 103053 | 5465337 |
| 11/07/14 | 93485 | 9664 | 1790 | 104939 | 5565349 |
*Information from 2010 Weekly U.S. Fuel Ethanol/Livestock Feed Production report (http://www.ethanolrfa.org/…)
-----------------------------------------------------------------------
DDG LINKS/RESOURCES
Organizations
*Distillers Grains Technology Council
http://www.distillersgrains.org
*National Corn Growers Association Corn Distillers Grains Brochure
*Iowa Corn
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
Nebraska Corn Board
*Renewable Fuels Association - Ethanol Co-Products
*American Coalition for Ethanol
*U.S. Grains Council
*South Dakota Corn Utilization Council
http://www.drieddistillersgrains.com
Government Sites
*Iowa Department of Agriculture and Land Stewardship/Office of Renewable Fuels & Coproducts
http://www.distillersgrains.com
University Sites
*University of Minnesota - Distillers Grains By-Products in Livestock
and Poultry Feed
*University of Illinois - Illinois Livestock Integrated Focus Team Distillers Grains site
http://ilift.traill.uiuc.edu/…
*University of Nebraska - Beef Cattle Production By-Product Feeds site
*University of Nebraska Extension
*Iowa Beef Center - Iowa State University
http://www.iowabeefcenter.org/…
*University of Missouri - Byproducts Resource Page
*South Dakota State University - Dairy Science Department - Dairy cattle research
(select "Distillers Grains" from the topic menu)
*Purdue University Renewable Energy Web Site
http://www.extension.purdue.edu/…
(select "Biofuels Co-Products from the menu)
-----------------------------------------------------------------------
DDG CONFERENCES
*Distillers Grains Technology Council Inc.'s 19th Annual Distillers Grains Symposium
The Distillers Grains Technology Council will hold its 19th Annual Distillers Grains Symposium on May 13-14, 2014 at the Sheraton Crown Center at Kansas City, Missouri. For information, contact the DGTC office at (515) 294-4019 or (800) 759-3448, or check the DGTC website (http://www.distillersgrains.org).
(If you are sponsoring or know of any event, conference or workshop on distillers grains, and would like to list it in the DTN Weekly Distillers Grains Update, please contact Cheryl Anderson (see contact info below).
-----------------------------------------------------------------------
We welcome any comments/suggestions for this feature. Please let us know what information is valuable to you that we could include in the Distillers Grains Weekly Update. Please feel free to contact Cheryl Anderson at (402) 364-2183, or e-mail cheryl.anderson@dtn.com.
(AG)
Copyright 2014 DTN/The Progressive Farmer. All rights reserved.
