farmgate: Have You Fed DDGS, And If So, Have Loads Varied In Quality?
Many livestock producers have found distillers’ dried grains (DDGS) to be an economical replacement for higher priced corn. But many of those have also found variability in the nutritional quality of DDGS, not only from one ethanol plant to another, but also variability from one load of DDGS to another from the same plant. Quality standards would not only help livestock producers with pricing, but also help managers of ethanol plants create their own quality controls for premium pricing.
USDA has established precise grain quality standards, helping merchandisers and traders know exactly what is being bought and sold. The same could happen with one of the fastest growing livestock feeds suggests Jacinto Fabiosa of Iowa State University. He is co-director of the Food and Agricultural Policy Research Institute (FAPRI). His research on the quality of nutritional variations of DDGS from 40 different ethanol plants presents challenges to the users. Fabiosa says corn used to have a 58% share of the feed market, but that has declined 11% due to the entry of DDGS into the market.
Over time, researchers have found that DDGS will vary in fat content from 4.3% to 18.7%, vary in crude protein content from 25.9% to 36.3%, Lysine will vary 11.2% and even will vary 4.6% within the DDGS output from an individual plant. Part of the reason may be the variation in grain entering the ethanol plant, which could be a blend of corn and other feed grains. Other potential reasons for variations in nutritional content stem from the alternatives used in the processing of the grain into ethanol.
Fabiosa says it is important for feed compounders to account for the variability. Nutrients could be oversupplied in a formulation upsetting the digestive balance within an animal. Subsequently, nutrients could be inadequate and negatively impact the growth and performance of the animal. Ideally, the DDGS would come from only one plant, but even then variability will occur. Using the DDGS with the lowest feed ration cost, the other 39 samples ranged from two-tenths of a cent more expensive per 100 lbs of feed to 42 cents more expensive per 100 lbs of feed.
Fabiosa said livestock producers could realize that some animals were being well-fed on the least cost, and others were getting short-changed on nutrition at a higher cost. He says, “These results strongly suggest that not all DDGS are created equal….Without a pricing mechanism that can reflect product quality differentials, above-average (in terms of nutrient profile quality) DDGS products will not gain any premium, and below-average DDGS products will not be discounted, so there is no incentive to improve quality.” Fabiosa says the yardstick that might be used to measure the quality of DDGS products could be Internet-based so both users and suppliers can estimate the value of a specific lot of DDGS.
The research also looked at the variability of nutrients and the effect on feed cost savings. An ethanol plant, wanting to optimize the quality of its DDGS product, would be able to place a value on metabolizable energy, crude protein, 5 amino acids and eight minerals. Subsequently, the feed compounder would know the nutritional component content and be able to balance the feed, from either one plant, or a group of plants to supply a homogenous DDGS product to livestock producers. The ultimate value of this process is to supply a livestock operator, such as a pork producer, with a DDGS product that has the optimum nutritional components for feeding the maximum amount of DDGS and benefiting from the least cost for the ration. Fabiosa works through an example that shows a potential $7.51 per cwt savings. That can either be realized by the feed compounder, the livestock producer, or both. He says that amount of savings would represent a loss of $1.11 million per year for the ethanol plant, if it were not selling DDGS based on nutritional content.
One of the big questions is the cost of the analysis to determine the nutritional content, and Fabiosa says that would be about $5 per ton, and he rhetorically asks if it would pay to test DDGS. He says that depends if the actual level of the nutrient from the test is high enough to produce a feed cost savings of more than $5 per ton.
Summary:
The popularity of DDGS as a livestock feed has rapidly expanded, but the nutritional content of the DDGS can vary widely, not only from plant to plant, but within a single plant. Ethanol plants which are producing a high value DDGS product could be pricing it based on its quality, and increasing plant revenues. Feed compounders could realize significant savings with the information about nutritional components and price their product based on its quality.
Posted by Stu Ellis on November 11, 2008 12:41 AM to farmgate