Friday, November 11, 2011

What is Low-oil Corn Distillers Dried Grains with Solubles (DDGS)?

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The corn ethanol industry in the U.S. has always been active in finding markets for its byproducts, namely what is now well-known as DDGS or distillers dried grains with solubles. The market for DDGS has evolved and now is exported and used by many livestock producers across the U.S. and around the world. But, in 2009, it was announced that by extracting oil from DDGS to use as biodiesel, another valuable co-product could increase profit margins. The consequence, however, leaves yet-another DDGS composition experiment, making it lower in fat content and higher in fiber and protein content.

Now, the U.S. Grains Council has announced that it is trying to educate foreign consumers about this change in composition of the DDGS product since feed formula compositions will need to change and livestock will perform differently on it. Unfortunately, studies are not yet complete in knowing exactly what that difference will be.

Interestingly, it appears that many Americans are not aware of the new difference in DDGS composition, either:
As more U.S. ethanol plants add oil extraction capacity either at the front end or back end of their processes, the supply of lower-oil distillers dried grains with solubles (DDGS) is increasing, and with it, the need to educate foreign DDGS users about its different characteristics.

“The lower oil content means a difference in how this DDGS will perform in livestock rations,” explained Sean Callanan, USGC manager of programs. “The Council has spent a lot of resources on building an international market for DDGS. Now we’re taking steps to educate people about lower-oil DDGS.”

In a first step, Council international directors who administer DDGS programs and international DDGS nutritionist consultants met in Minneapolis last week with ethanol and DDGS industry contacts and leading U.S. livestock nutritionists to discuss lower-oil DDGS.

For many of the attendees, this was the first they had heard about lower-oil DDGS,” said Callanan.

The two-day program began with an exploration of ethanol industry dynamics, including the differing financial successes of plants with and without oil extraction. At one time, DDGS oil content was 10-15 percent , but as extraction becomes more efficient, oil-content is likely to be much lower.

Nutritionists from the swine, beef, dairy and poultry industries reported that only preliminary data is currently available for feed formulations with lower-oil DDGS, but new testing is already under way. When research results are available beginning next February, the Council will determine its next steps, including possible conference calls or webinars.

“As this newer form of DDGS moves into the marketplace, we want to make sure our customers aren’t surprised by the difference in its performance,” said Callanan. “We will need to begin re-educating them about what to look for and how to recalibrate feed formulas for different levels of oil in DDGS.”

(source: U.S. Grains Council)

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