DTN Weekly Distillers Grains Update

FDA Publishes Revised FSMA Rules for Spent Grains

DAVENPORT, Neb. (DTN) -- The U.S. Food and Drug Administration published revisions to a proposed rule for the use of spent grains, but it is one the alcoholic beverage brewing industry is likely to be happy about.

The FDA published the corrected proposed rule -- Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Food for Animals -- on Sept. 29 (http://1.usa.gov/…).

The original rule was among three all designed to prevent food-borne illness and to implement portions of the Food Safety Modernization Act, signed into law in January 2011.

When the original rule was proposed, it would have required brewers and distillers to comply with full human food and animal food rules if their spent grains were used for animal feed.

Concerns immediately arose from the brewers and dairy industries that the rule would impose costly and burdensome measure on breweries to ensure the spent grains met with regulations, as well as making the sale of such grains to livestock producers more difficult.

In fact, The Beer Institute, an industry group representing the $246 billion beer industry, calculated a single large brewery, in order to comply with the proposed rule, could see annual costs as high as $13.6 million per year.

The Beer Institute -- joined by other industry organizations such as the National Milk Producers Federation, the International Dairy Foods Association and the American Malting Barley Association -- spent nearly two years working with Congress, regulators and industry organizations to educate them on processes already in place.

Christopher Thorne, vice president of communications for the Beer Institute in Washington, D.C., told DTN the groups worked to present economic and scientific arguments why it is unnecessary for FDA to add additional regulations to spent grains and other by-products of brewing.

"Our case was made based on two things," Thorne said. "One, we were already meeting human food standards that we are required to comply with. Secondly, we had the opportunity to demonstrate and show the practices we already have in place. We were able to prove that we are already exceeding expectations."

The groups claimed that for hundreds of years, brewers have disposed of their spent grains by giving or selling to farmers and ranchers, yet there has not once been a recorded incidence of human health risk related to spent grains. The groups also maintained that because alcohol is consumed by humans, the production is already held to high standards required for human health standards and the proposed rules would essentially be a duplication of effort.

On Sept. 19, FDA announced (http://1.usa.gov/…) its support of the groups' stance that human food processors such as producers of spent grains that create by-products used as animal food are already complying with FDA human food safety requirements. So, FDA clarified that such processors would not need to comply with the full animal food rule if they are already complying with the human-food rule.

Thorne said the Beer Institute was very happy with FDA's announcement to revise the proposed rule

"We believe the change is reflective of our efforts to work with the FDA," Thorne said. "The FDA was very receptive to our comments, particularly when you look at current management practices that require distilleries to maintain the integrity and cleanliness of ingredients.

"We thought it was a very constructive relationship," he said.

Thorne said the Institute is optimistic that the changes to the proposed rule will be made permanent.

"It appears the FDA is headed in the right direction," he said. "We anticipate that this final rule will allow brewers to continue what is already a terrific recycling story. We are very optimistic."

Thorne stressed the importance of the relationship between brewers and farmers, and that feeding spent grains to cattle is a type of "recycling" he considers very important.

"Keeping the spent grains in the life cycle is better than destroying them and taking them out of the food chain," he said, adding the current motto describing the process is "from brew to chew."

PUBLIC COMMENTS

The new public comment period will end in 74 days on Dec. 15, 2014. Anyone wishing to comment may submit either electronic or written comments on the proposed rule by that date at Regulations.gov. The Docket No. is FDA-2011-N-0922.

The FDA will accept comments on the proposed revisions of the four proposed rules for 75 days while continuing to review comments already received on the sections of the proposed rules that are staying the same. The agency will consider both sets of comments before issuing final rules in 2015.

More information on the revisions to the proposed rule can be found on the FDA's website at: http://www.fda.gov/….

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

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IN THE NEWS

Swine Nutritionists Resolve Fiber, Energy DDG Snags

The fact that ethanol co-products such as dried distillers grains with solubles have slightly higher fiber and lower energy content does not mean it is not a good value in swine diets, according to an article by the National Pork Board (http://bit.ly/…).

Since feed costs still constitute about 65% of production costs for producers, it is imperative that they strive for the lowest-cost rations and best feed efficiency. Sometimes that means incorporating alternative feed ingredients such as DDGS.

Dr. Christ Hostetler, director of animal science and technology for the Pork Checkoff, said that DDGS has become so widely used that many nutritionists do not consider it as an alternative ingredients.

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While DDGS is a good value and can lower feed costs, its higher fiber and lower energy can add slightly to costs, since pigs don't utilize energy derived from fiber as well.

Swine nutritionists have been researching how to utilize the greatest amount of DDGS with the least impact on performance.

The Industry Productivity Analysis, research compiled from data from 35% of the U.S. sow herd, contains benchmarks for key productivity indicators for all types of swine operations.

The report found that the average feed efficiency is 1.48 pounds of feed per pound of gain for nursery pigs, 2.50 pounds for wean-to-finish production, and 2.66 pounds for conventional finishing.

Research funded by the Pork Checkoff has found answers in how to best utilize alternative feed ingredients such as DDGS. Summaries can be found at porkstore.pork.org in Pork Industry Nutritional Efficiency Consortium Research 2007-2011.

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

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DTN WEEKLY DDG SPOT PRICES

CURRENT PREVIOUS
COMPANY STATE 10/3/2014 9/19/2014 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 $80 $120 -$40
Indiana Dry $95 $120 -$25
Iowa Dry $100 $125 -$25
Michigan Dry $105 $120 -$15
Minnesota Dry $90 $105 -$15
North Dakota Dry $95 $100 -$5
New York Dry $120 $132 -$12
South Dakota Dry $85 $100 -$15
Hawkeye Gold, IA (515-663-6413)
Iowa Dry $90 NO
Modified $40 NO
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $105 $110 -$5
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $115 $115 $0
Iowa Dry $115 $120 -$5
Michigan Dry $120 $130 -$10
Minnesota Dry $100 $115 -$15
Missouri Dry $120 $135 -$15
Ohio Dry $120 $120 $0
South Dakota Dry $100 $105 -$5
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $110 $100 $10
Wet $30 $35 -$5
Illinois Dry $105 $105 $0
Nebraska Dry $110 $100 $10
Wet $30 $35 -$5
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $100 $105 -$5
Indiana Dry $100 $105 -$5
Iowa Dry $95 $100 -$5
Michigan Dry $100 $105 -$5
Minnesota Dry $90 $95 -$5
Nebraska Dry $100 $100 $0
New York Dry $165 $150 $15
North Dakota Dry $95 $95 $0
Ohio Dry $100 $105 -$5
South Dakota Dry $95 $95 $0
Wisconsin Dry $95 $100 -$5
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $100 $100 $0
Iowa Dry $110 $115 -$5
Minnesota Dry $100 $105 -$5
Nebraska Dry $110 $110 $0
Ohio Dry $105 $115 -$10
South Dakota Dry $95 $95 $0
Western Milling, Goshen, California (559-302-1074)
California Dry $185 $185 $0
*Prices listed per ton.
Weekly Average $102 $109 -$7
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 10/2/2014 $3.2275 $115.27
Soybean Meal 10/2/2014 $308.70
DDG Weekly Average Spot Price $102.00
DDG Value Relative to: 10/3 9/26 9/19
Corn 88.49% 93.62% 90.23%
Soybean Meal 33.04% 34.89% 33.15%
Cost Per Unit of Protein:
DDG $4.08 $4.36 $4.36
Soybean Meal $6.50 $6.58 $6.92
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 (Sep 26, 2014)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 110.00-125.00 40.00-60.00 23.00-32.00
Minnesota 110.00-120.00 45.00 50.00
Nebraska 95.00-118.00 40.00-58.00 30.00-46.00
South Dakota 92.00-105.00 45.00-52.00 26.00-28.00
Wisconsin 100.00-130.00 43.00-60.00 NQ
Eastern Corn Belt 100.00-125.00 65.00-70.00 NQ
Kansas 115.00-145.00 NQ 40.00-50.00
Northern Missouri 115.00-135.00 NQ 35.00-42.00
DELIVERED PRICES PER TON
CIF NOLA 160.00-172.00
Pacific Northwest 165.00-178.00
California 165.00-180.00
Texas Border (metric ton) 180.00-205.00
Lethbridge AB 150.00-160.00
Chicago 95.00-125.00

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

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Sep 30, 2014)

Distillers Dry Grains 
  Rail to California Points         170.00          dn 10.00
  FOB Truck to California Points    180.00-185.00   unch-dn 10.00
PACIFIC NORTHWEST WEEKLY FEED (Tue Sep 130, 2014)
Offers for Distillers Dried Grains delivered in September by rail to feed mills in the Pacific Northwest were steady to 9.00 lower, from 167.00-185.00. Offers for distillers dried grains trans-loaded onto trucks and delivered during September to Willamette Valley dairies were also steady to 9.00 lower, from 185.00-200.00.

*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.)
9/05/14 91608 9470 1754 102832 5453571
9/12/14 92003 9511 1761 103275 5477103
9/19/14 87852 9082 1682 98616 5230016
9/26/14 87062 9000 1667 97729 5182952

*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

(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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