DTN Weekly Distillers Grains Update

DDG, Glycerin Can Replace Corn in Feedlot Diets

Feedlot producers can feed distillers grains and glycerin to replace a portion of corn in feedlot diets without any negative effect on rumen pH, according to a feeding trial conducted at the University of Minnesota at St. Paul.

The study was born from the university's partnerships with the Minnesota Corn Growers Association and the Agricultural Utilization Research Institute, which funded the project, according to Devan Paulus Compart, research assistant at the University of Minnesota.

Compart said both organizations were interested in new uses for alternative feeds such as wet distillers grains with solubles (WDGS) and glycerin. Compart, along with Jeff Jaderborg and others, had conducted a parallel study using WDGS and glycerin in feedlot diets, so the new study was a progression from the first study.

"We wanted to see how WDGS and glycerin would affect the rumen environment in order to substantiate the findings of the first trial," Compart said.

Both studies used the same four dietary treatments: a control diet with 86% steam-flaked corn on a dry matter basis, 10% soy glycerin replacing the corn, 40% WDGS in place of corn, and 10% glycerin and 40% WDGS both replacing corn.

The first study was designed "to determine the effect of substituting modified distillers grains with solubles or soy glycerin for steam-flaked corn in finishing diets on performance and carcass characteristics of yearling cattle."

Jaderborg found glycerin and WDGS could partially replace steam-flaked corn in feedlot diets with no impact on average daily gain, feed efficiency, final body weight, hot carcass weight, dressing percent, KPH, rib-eye area, back-fat, marbling score, or USDA Yield Grade.

The second study examined the effect of feeding glycerin and distillers grains on rumen fermentation and diet digestion in feedlot steers. The same four dietary treatments were used as in the first study.

The study found rumen ammonia concentration was not affected by the diet, suggesting that glycerin or WDGS can replace steam-flaked corn without having a negative impact on rumen microbial growth.

Overall, the volatile fatty acid production in the rumen was improved with WDGS, likely due to the high protein content of WDGS allowing for improved microbial growth.

Compart also found that results on the rumen pH are inclusive.

"We had really high rumen pH when the steers were fed glycerin. Normally, rumen pH would stay the same or be reduced with glycerin," she said. "We can't explain why the rumen pH went from 5.9 to 6.5 for the control diet without glycerin compared to the diets with glycerin. We have no data that supports that change."

The study also found cattle consuming both WDGS and glycerin had less rumen acetate production, more rumen propionate production and a lower rumen acetate/propionate ratio.

"The improvement in propionate production means the diet is more energy efficient because less energy is being lost to methane with propionate versus acetate," she said. "The overall implication is that WDGS and glycerin likely have a positive effect on rumen VFA(volatile fatty acids) profile."

Overall, the important message from the study is that replacing steam-flaked corn with WDGS and glycerin had a positive impact on the rumen VFA profile and may have a positive impact on total VFA production, Compart said. That may be an indication of improved microbial growth which ultimately will result in an increase in microbial crude protein.

The trial may also show that the diets improved protein availability to the animals in the form of microbial crude protein as well, however, Compart said researchers are still analyzing data from the experiment.

For producers, the trial shows that feeding glycerin and WDGS won't cause rumen pH changes that affect cattle performance or health.

"Our goal was to see how these products affected the rumen and growth performance in cattle," she said. "Alternative feeds may be cheaper than corn. We just wanted to make sure they are not detrimental in feedlot diets."

Cheryl Anderson can be reached at Cheryl.anderson@dtn.com.

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IN THE NEWS

DDG Reaches Record Premium Over Corn

Higher prices of soybean meal and low Chinese import levies have pushed prices of dried distillers grains to record high values compared to corn, according to an article by Agrimoney.com (http://bit.ly/…).

According to statistics from the U.S. Grains Council, March sales from the U.S. Gulf export market reached $325 per ton, the highest level in a year. Corn export prices, on the other hand, have dropped considerably in the past year to about $220 a ton for March.

Statistics compiled by DTN show DDG spot prices trading between 132% and 139% of the value of corn. Those values are high, but lower than 140% to 145% values seen in December 2013 when railcar availability and logistics issues began to push prices higher.

The value of DDG relative to soymeal, according to DTN's statistics, has hovered between 48% and 52% during March.

Demand from Chinese buyers is continuing to grow, using DDG to replace corn most in hog and poultry feed. The popularity of DDG is boosted by a relatively low import tax rate of just 5%, as DDG is exempt from the 13% VAT tariff applied to both corn and soymeal buy-ins.

Another benefit of DDG for Chinese buyers is the decreases in transportation costs, since DDG is backhauled to Asia in shipping containers empty after being used for exports to the U.S.


Southeast Asian Demand for U.S. Corn Gluten Meal Rises

Exports of U.S.-produced corn gluten meal to Southeast Asia increased by 47% in the past year, according to the U.S. Grains Council (http://bit.ly/…).

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Corn gluten meal, according to the Council, is the combination of bran fibers and corn oil cake left from the extraction of corn oil from the corn hull or bran.

Importing nearly 400,000 metric tons in 2013, Southeast Asia has become a vital market for the U.S. with three of the top 10 CGM export markets located in that region. Indonesia alone accounted for 25% of the market due to its high demand for high-quality protein from its poultry industry, importing more than 256,000 tons of CGM imports valued at $176 million in 2013, marking a 36% increase from the 2012 total.

Because Indonesia's lack of technical and trade information limited its CGM use and imports, the Council conducted a series of workshops and meetings to introduce CGM as a valuable protein source and to encourage end users to utilize CGM.

Adel Yusupov, USGC regional director for southeast Asia, said, "Even with this large increase, there is still work to be done. The Council's overall long-term objective for Indonesia is to win an increasing share of the growing demand for U.S. coarse grains and co-products through intensive market education."

Cheryl Anderson can be reached at Cheryl.anderson@dtn.com.

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DTN WEEKLY DISTILLERS GRAIN SPOT PRICES

CURRENT PREVIOUS
COMPANY STATE 3/28/2014 3/21/2014 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $245 $245 $0
Modified $125 $125 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $255 $255 $0
Indiana Dry $255 $260 -$5
Iowa Dry $240 $245 -$5
Michigan Dry NO $260
Minnesota Dry $230 $250 -$20
North Dakota Dry $230 $250 -$20
New York Dry NO NO
South Dakota Dry $230 $240 -$10
Hawkeye Gold, IA (515-663-6413)
Iowa Dry $235 $235 $0
Modified $72 $83 -$11
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $240 $240 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $225 $225 $0
Wet $95 $95 $0
Illinois Dry $260 $260 $0
Nebraska Dry $225 $225 $0
Wet $95 $95 $0
Wisconsin Dry $230 $230 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $245 $240 $5
Indiana Dry $240 $220 $20
Iowa Dry $230 $225 $5
Michigan Dry $240 $225 $15
Minnesota Dry $220 $210 $10
Nebraska Dry $238 $225 $13
New York Dry $255 $240 $15
North Dakota Dry $220 $215 $5
Ohio Dry $245 $225 $20
South Dakota Dry $220 $210 $10
Wisconsin Dry $230 $220 $10
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $260 $255 $5
Iowa Dry $225 $230 -$5
Minnesota Dry $225 $230 -$5
Nebraska Dry $230 $240 -$10
Ohio Dry $260 $260 $0
South Dakota Dry $225 $230 -$5
Western Milling, Goshen, California (559-302-1074)
California Dry $355 $355 $0
*Prices listed per ton.
Weekly Average $236 $236 $0
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.

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VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 3/27/2014 $4.9200 $175.71
Soybean Meal 3/27/2014 $470.50
DDG Weekly Average Spot Price $236.00
DDG Value Relative to: 3/28 3/21 3/14
Corn 134.31% 137.95% 135.30%
Soybean Meal 50.16% 51.77% 52.05%
Cost Per Unit of Protein:
DDG $9.44 $9.44 $9.36
Soybean Meal $9.91 $9.60 $9.47
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.

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USDA MARKET NEWS/DISTILLER GRAINS PRICES

USDA WEEKLY DISTILLERS GRAINS SUMMARY (Mar 21, 2014)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 235.00-255.00 83.00-120.00 52.00-75.00
Minnesota 240.00-245.00 90.00 NQ
Nebraska 230.00-240.00 85.00-115.00 62.00-76.00
South Dakota 237.50-250.00 90.00-100.00 75.00-85.00
Wisconsin 225.00-245.00 105.00-110.00 NQ
Eastern Corn Belt 230.00-265.00 90.00-105.00 NQ
Kansas 230.00-250.00 NQ 65.00-77.00
Northern Missouri 245.00-255.00 NQ 70.00
DELIVERED PRICES PER TON
CIF NOLA 290.00-325.00
Pacific Northwest 315.00-335.00
California 320.00-340.00
Texas Border (metric ton) 345.00
Lethbridge AB 280.00
Chicago 248.00-270.00

Dried Distillers Grain: 10% Moisture
Modified Wet Distillers: 50-55% Moisture
Wet Distillers Grains: 65-70% Moisture

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Mar 25, 2014)

Distillers Dry Grains 
  FOB Truck                           350.00  up 5.00
  Rail Delivered California Points    NA
PACIFIC NORTHWEST WEEKLY FEED (Tue Mar 25, 2014)
Offers for Distillers Dried Grains delivered in April by rail to feed mills in the Pacific Northwest were 295.00-317.00, with no recent price comparison available, as week ago offers were for March delivery.  Offers for distillers dried grains trans-loaded onto trucks and delivered during April to Willamette Valley dairies were 310.00-335.00, also with no recent price comparison available as week ago offers were for March delivery.

*All prices quoted per ton unless otherwise noted.

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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.)
2/28/14 88949 9133 1691 99773 4656223
3/07/14 86461 8878 1644 96983 4526016
3/14/14 88650 9103 1686 99438 4640598
3/21/14 88053 9041 1674 98769 4609348

*Information from 2010 Weekly U.S. Fuel Ethanol/Livestock Feed Production report (http://www.ethanolrfa.org/…)

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DDG LINKS/RESOURCES

Organizations

*Distillers Grains Technology Council

http://www.distillersgrains.org

*National Corn Growers Association Corn Distillers Grains Brochure

http://ncga.com/…

*Iowa Corn

http://www.iowacorn.org/…

Nebraska Corn Board

http://www.nebraskacorn.org/…

*Renewable Fuels Association - Ethanol Co-Products

http://www.ethanolrfa.org/…

*American Coalition for Ethanol

http://www.ethanol.org/…

*U.S. Grains Council

http://www.grains.org/…

*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

http://www.ddgs.umn.edu

*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

http://beef.unl.edu/…

*University of Nebraska Extension

http://ianrpubs.unl.edu/…

*Iowa Beef Center - Iowa State University

http://www.iowabeefcenter.org/…

*University of Missouri - Byproducts Resource Page

http://agebb.missouri.edu/…

*South Dakota State University - Dairy Science Department - Dairy cattle research

http://dairysci.sdstate.edu/…

(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)

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DDG CONFERENCES

*Distillers Grains Technology Council Inc.'s 16th Annual Distillers Grains Symposium

The Distillers Grains Technology Council will hold its 18th Annual Distillers Grains Symposium on May 14-15, 2014 at the Omni Mandalay at Las Colinas, Dallas, Texas. For information, contact the DGTC office at (502) 852-1575 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).

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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) 364-2183-1527, or e-mail cheryl.anderson@dtn.com.

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