Distiller's Grains:  Milford's Next Problem?


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Distillers Grains Could Present Challenges
According to the USDA, "the fuel ethanol industry is currently experiencing unprecedented growth.  In conjunction with this expansion, the quantity of distillers grains produced over time has grown in parallel".  VeraSun's Milford air permit application indicates it will produce over 385,000 tons of distillers grains per year.


Next Phase: Bio-Diesel?
VeraSun could use part of its distillers grains to produce bio-diesel.  In a November press release VeraSun announced that it intends to diversify into bio-diesel production, using the starch portion of corn to produce ethanol, and the fat content to produce bio-diesel.  The release indicates VeraSun is evaluating possible sites for a 30 million gallon-per-year refinery.  We do not know whether VeraSun is considering Milford for this site, but the site plan submitted with their air permit application shows the orientation of the ethanol project using up only half of their available space ~ leaving ample room for a bio-diesel refinery to be built in the future.


The Ethanol/Cattle Connection
VeraSun currently markets it's distillers grains as a high protein supplement to livestock feed.  Among livestock, dairy cattle utilize distillers grains best, with beef cattle taking second place.  Distillers grains can also be fed to hogs and poultry, though less successfully. If built, the Milford refinery alone would produce enough distillers grains to supplement feed for at least 150,000 dairy cattle.  To put that in perspective, USDA census data (2002) shows a total Indiana cattle population (beef and dairy) of about 860,000. Compounding the situation, according to the Indiana Department of Environmental Management, there are currently at least 25 ethanol refineries either under construction or in the advanced stages of planning in Indiana.

A front page article in the January 12 edition of the Farmer's Exchange, entitled "Livestock, Distillers Grains Go Together", highlights the challenges of dealing with distillers grains:


" An increase in ethanol production throughout the country has led to an abundance of a byproduct that has proven difficult to move and utilize.

According to Harold Tilstra, a veterinarian and regional manager for Land O' Lakes Purina Feeds, millions of metric tons of dried distillers grain soluble (DDGS), a high-nutrient livestock feed that is created during ethanol production, is difficult to transport because it often clumps together, clogging augers, trucks and other transportation systems.

Tilstra discussed the issue with participants at the Michigan Agri-Business Assn. 74th annual Winter Conference and Trade Show Monday in Lansing.

"Most ethanol production is focused in the Midwest, but animals are all over the country, so shipping and handling is important," Tilden pointed out. "Theoretically we can use all the DDGS, but everything has to line up."

In order to line things up, Tilstra believes it makes more sense to use DDGS locally, rather than risk the complications that come with shipping. He said that could create problems if Michigan's livestock industry continues to dwindle.

"You're producing distillers grain faster than you're growing your livestock industry," Tilstra said. "If you want to keep up, you need more animals."

Ag professionals in Wisconsin and Illinois have come to similar conclusions for their states ~ logistics and cost issues involved with transporting distillers grains make local feeding more favorable than shipping.

In response, large confined cattle feeding operations are being built near ethanol refineries.  And, conversely, ethanol companies are choosing sites located near large cattle operations.  For instance, In Mead Nebraska, a "closed loop" confinement system is being built, where 30,000 head of cattle will consume the distillers grains from a 24 million gallon per year ethanol refinery nearby.


Unanswered Questions
Would VeraSun build it's bio-diesel refinery at the Milford site? Would large scale cattle feeders be attracted to Milford by the prospect of reduced feed costs? Would either of these industries be a good fit with our lakes area lifestyle and tourism? Could a glut force some distillers grains to wind up being landfilled or otherwise dumped?

At this point, no one knows.


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