DTN Weekly Distillers Grains Update

Lower Anhydrous Application Possible in Diets Containing Low-Quality Forage, WDG

DAVENPORT, Neb. (DTN) -- Producers treating low-quality forage with anhydrous ammonia can save money by using lower application rates without sacrificing performance.

A recent Kansas State University feeding trial showed that lower application rates of ammoniation can be effective when feeding low-quality forage with wet distillers grains, according to Justin Waggoner, beef systems specialist for Kansas State University Research and Extension.

Treating low-quality forage with anhydrous ammonia has been done for a long time, Waggoner said, dating back to at least the early 1900s. Cattlemen tended to ammoniate more in drought when trying to improve low-quality forages like straw. But it was the application rate that interested him the most.

"A previous KSU large scale case study indicated a proportionally greater response at a 1.5% application rate" he said. "So my initial objective behind the study was to look at cattle performance with various anhydrous rates in a limit-fed situation."

Cattle producers had also been asking if there was an advantage to treating forages in diets containing WDG, therefore this study provided the opportunity to address that question.

Waggoner explained that ammoniation breaks down the cell wall to increase microbial access to the nutrients inside.

"The anhydrous acts like a strong detergent, which causes the plant cell wall to rupture," he said. "With this process, we see improvements in digestion and subsequent forage intake."

The forage is put in a stack, covered with plastic, then anhydrous is pumped into the stack. After treatment, the plastic is opened and the anhydrous is allowed to dissipate, he said.

Since the commonly-used application rate of anhydrous is about 3%, Waggoner decided to also look at 1.5% because of the previous case study and other research suggested there was a proportionally greater response between 0% and 1.5%, than from 1.5% to 3%.

Also important was that producers could save money on anhydrous by cutting the application rate down to 1.5% rather than 3%.

"Prior to this study, especially with anhydrous ammonia prices between $700 and $800 a ton, it seemed there might be some economic advantages to a lower application rate," he said. "When a lot of the research for the 3% application rate was conducted, anhydrous was probably about $200 a ton. That's quite a difference in price.""

Waggoner estimated that by cutting the application rate to 1.5%, producers could save about 10% to 15% per ton, depending on the situation.

For the trial, Waggoner used 132 second-trimester, spring-calving, Angus-cross cows, most of which were between four and five years old. The cows were limit fed 1.9% of their initial body weight a diet of 65% wheat straw, 20% wet distillers grains and 15% rolled sorghum.

Waggoner said the WDG was used as an energy and protein source, as well as a wet ingredient to improve the ration characteristics and palatability, especially when mixing dry wheat straw and grain.

"To me, one of the values of using WDG is that it makes the diet aggregate together better," he said. "Wet distillers does a great job of that."

At the end of the trial, Waggoner found the 1.5% application rate increased ration costs by 21%, but increased the average daily gain by 23%. For the 3% application rate, the ration costs increases by 35%, but the ADG only increased 25% relative to a control diet that contained untreated straw.

Waggoner said when choosing an application rate, producers need to consider two factors: the price of anhydrous and the improvement in performance relative to the cost.

As far as body condition scores, the cows fed 3% and 1.5% had greater scores overall compared to those eating diets with untreated forage. Also, the back fat and rump fat thickness seemed not to be influenced by anhydrous application.

The take-home message gained from the trial is two-fold, Waggoner said.

First, it appears producers can get a response in terms of performance to treating low-quality forages with an anhydrous application rate lower than the 3% traditional rate. Secondly, the responses to ammoniating forage were maintained in a diet that contained 20% WDG.

Waggoner said further research in this area is certainly a possibility, but that would depend on the availability of resources.

The research summary of Waggoner's trial can be found on page 105 of the Kansas State University Agriculture Experiment Station and Cooperative Extension Service's Research Roundup for 2014 (http://bit.ly/…).

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

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IN THE NEWS

China Imports Record Grains Despite Trade Issues

The trade issues surrounding China's anti-biotech stance in late 2013 and 2014 did not hinder the country from importing record amounts of U.S. grains, according to a news story by the U.S. Grains Council (http://bit.ly/…).

In fact, China imported more than 3 million metric tons each of U.S. corn, sorghum and dried distillers grains with solubles in the current marketing year ending Aug. 31.

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China's zero tolerance for the MIR 162 biotech trait in corn brought exports of U.S. DDGS to a halt, especially after the country's most recent announcement requiring all shipments of DDGS to be accompanied by an official certification that it is MIR 162-free. No such certification exists.

The Council has been working towards a solution to the trade disruptions, recognizing that China is a valuable buyer of U.S. grains and co-products. Chinese end-users love the quality of U.S. feed products, especially since China's demand for high-quality corn continues to exceed available supply. Chinese end users can also find huge margins in using U.S. corn, sorghum and DDGS in light of the country's high domestic prices. Recent production increases and last year's record corn crop have not kept China's domestic corn prices from rising.

But in the absence of such robust corn and DDGS imports, Council staff has been promoting sorghum in China, since it is not subject to tariff rate quota restrictions. Consequently, a surge in sorghum exports to China has occurred. According to the Council's article, China is forecast to buy more than 30% of all U.S. sorghum production this year.

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

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CURRENT PREVIOUS
COMPANY STATE 8/29/2014 8/22/2014 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $120 $120 $0
Modified $65 $65 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $140 $125 $15
Indiana Dry $135 $125 $10
Iowa Dry $130 $125 $5
Michigan Dry $130 $125 $5
Minnesota Dry $100 $100 $0
North Dakota Dry $105 $110 -$5
New York Dry $150 $115 $35
South Dakota Dry $100 $95 $5
Hawkeye Gold, IA (515-663-6413)
Iowa Dry NO NO
Modified NO NO
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $110 $105 $5
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $140 $105 $35
Iowa Dry $115 $105 $10
Michigan Dry $140 $105 $35
Minnesota Dry $115 $105 $10
Missouri Dry $135 $125 $10
Ohio Dry $140 $100 $40
South Dakota Dry $100 $95 $5
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $115 $110 $5
Wet $50 $40 $10
Illinois Dry $130 $130 $0
Nebraska Dry $115 $110 $5
Wet $50 $40 $10
Wisconsin Dry NO NO
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $125 $120 $5
Indiana Dry $125 $120 $5
Iowa Dry $120 $110 $10
Michigan Dry $125 $120 $5
Minnesota Dry $110 $105 $5
Nebraska Dry $105 $100 $5
New York Dry $130 $125 $5
North Dakota Dry $105 $100 $5
Ohio Dry $120 $110 $10
South Dakota Dry $105 $100 $5
Wisconsin Dry $110 $105 $5
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry NA $120
Iowa Dry NA $110
Minnesota Dry NA $105
Nebraska Dry NA $110
Ohio Dry NA $120
South Dakota Dry NA $105
Western Milling, Goshen, California (559-302-1074)
California Dry $185 $190 -$5
*Prices listed per ton.
Weekly Average $119 $111 $8
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 8/28/2014 $3.6175 $129.20
Soybean Meal 8/28/2014 $433.20
DDG Weekly Average Spot Price $119.00
DDG Value Relative to: 8/29 8/22 8/15
Corn 92.11% 85.80% 81.99%
Soybean Meal 27.47% 26.82% 22.83%
Cost Per Unit of Protein:
DDG $4.76 $4.44 $4.24
Soybean Meal $9.12 $8.71 $9.77
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 (Aug 22, 2014)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 90.00-130.00 35.00-65.00 25.00-32.00
Minnesota 90.00-120.00 45.00 50.00
Nebraska 80.00-115.00 45.00-56.00 35.00-41.00
South Dakota 85.00-97.50 45.00-54.50 25.00-28.00
Wisconsin 105.00-120.00 46.00-55.00 NQ
Eastern Corn Belt 100.00-130.00 60.00-71.00 NQ
Kansas 110.00-125.00 NQ 40.00-50.00
Northern Missouri 115.00-130.00 NQ 35.00
DELIVERED PRICES PER TON
CIF NOLA 170.00-183.00
Pacific Northwest 165.00-178.00
California 170.00-180.00
Texas Border (metric ton) 190.00-210.00
Lethbridge AB 145.00
Chicago 120.00-140.00

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

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Aug 26, 2014)

Distillers Dry Grains 
  Rail to California Points     170.00-175.00  up 15.00
  Truck to California Points    180.00-190.00  up 17.00-10.00
PACIFIC NORTHWEST WEEKLY FEED (Tue Aug 26, 2014)
Offers for Distillers Dried Grains delivered in August by rail to feed mills in the Pacific Northwest were steady to 17.00 higher, from 180.00-195.00. Offers for distillers dried grains trans-loaded onto trucks and delivered during August to Willamette Valley dairies were also steady to 17.00 higher, from 198.00-210.00.

*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.)
8/01/14 89137 9215 1706 100058 5306495
8/08/14 92003 9511 1761 103275 5477103
8/15/14 92596 9572 1773 103941 5512401
8/22/14 90224 9327 1727 101279 5371209

*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.

(PH/GH/ES/SK­)

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