Impacts of Increased Local Processing: Update on Ethanol and Soybean Operations
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Value Added Agriculture Program www.iavaap.org Impacts of Increased Local Processing: Update on Ethanol and Soybean Operations Iowa Grain Quality Initiative Iowa State University January 11, 2008 Surveys conducted by: ISU Extension Value Added Agriculture Program Sponsored by: ISU Extension Iowa Grain Quality Initiative
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Impacts of Increased Local Processing: Update on Ethanol and Soybean Operations. Iowa Grain Quality Initiative Iowa State University January 11, 2008 Surveys conducted by: ISU Extension Value Added Agriculture Program Sponsored by: ISU Extension Iowa Grain Quality Initiative. - PowerPoint PPT Presentation
Transcript of Impacts of Increased Local Processing: Update on Ethanol and Soybean Operations
Value Added Agriculture Program
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Impacts of Increased Local Processing: Update on Ethanol and Soybean Operations
Iowa Grain Quality Initiative Iowa State University
January 11, 2008
Surveys conducted by:ISU Extension Value Added Agriculture
ProgramSponsored by:
ISU Extension Iowa Grain Quality Initiative
Value Added Agriculture Program
www.iavaap.org
Project objectives
• Maintain a data set to define the scope and variation involved in the current industry activities surrounding grain origination methods, impact on grain storage and co-product handling/marketing.
• Measure impacts of growth on the ethanol and soy processing industries and on their input supply chains.
Value Added Agriculture Program
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Operating plants137 Plants in USA in 26 states 7.59 BGY 27 Plants in Iowa 2 BGY
Construction/expansion68 Plants in USA 6.5 BGY 18 Plants in Iowa 2 BGY
Planned Approximately 15 BGY USA 2.5 BGY in Iowa
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Plants operating in 2006• Average production
– 60 mgy • Range
– 20 mgy – 120 mgy• Plants produce at 105-110%
above rated capacity• Most have outbound rail access• Few have inbound rail access
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Plants currently under construction
• Average production– 85 mgy– Range 35 – 200 mgy– Expansions may double
original plant size
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2006 vs. 2007
• Plants are larger
• Fractionation
• Higher corn prices compared
with ethanol prices
• Distillers grains became larger percentage of income
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Iowa Ethanol Production and Corn UsageSummary Statistics
nEthanol Producedmil gal/yr
Corn Usedmil bu/yr
DGS000 tons/yr
Current Dry-grind Plants
24 1,640 591 5,021
Plants, expansions under construction
18 1,410 503 4,280
Wet Mills 7 1,210 436 3,704
Nearby, Iowa Draw**
6 402 144 1,220
Subtotal 55 4,662 1,674 14,225
Announced 27 2,523 901 7,659
Total 82 7,185 2,575 21,884
*Operating at rated capacity.**Plants in bordering counties of other states with 50% use assigned to Iowa corn.
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Distillers Grains production• In 2007, the USA is expected to produce 16 million tons of
DDGS• 90% is sold in US as livestock feed • Export customers include:
– Mexico– Taiwan– Japan– China– Morocco– Costa Rica– EU (approved GM crops in 2006 production; not ’07)
Feeds Use75% Cattle20% Swine5% Poultry and other
(Meat goats, too!)
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DDGS Current issues• Need a better way to get the product to the
customer – • Flowability still an issue• Marketing groups being formed for larger buyers
– Product not standardized, but…
» A biological process lends itself to variability.
» No other feed ingredient has mandated standard.
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DDGS Quality issues
• Color is the big tip-off with export customers.
• Variability in nutrient content
• Mycotoxins
• Digestibility (particularly protein and amino acid digestibility due to Maillard reaction)
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Soybean Processing Survey• Survey asked for:
– Processing capacity– Preferred soybean quality– Types of products– Amount of storage
• Contacted 31 soybean processing plants and 14 biodiesel refineries; 11 responded
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Soybean Processing
• Solvent crush plants• Expeller plants• Mills/Flaking plants• Soyfood
– Some plants more capable of handling Indentity Preserved and Organic Soybeans
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Crush and Expeller plants
• Crush (solvent) plants (13)– Capacity 27,000 – 100,000+ bu/d– Oil refining capabilities, meal, hulls– Capacity for 98.5% of Iowa’s 2007 crop
• Expeller plants (11)– Range 600 - 33,000 bu/d– Better able to handle specialty beans– Meal and oil differ from solvent products
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Milling, Soyfoods
• Whole beans, usually Identity Preserved
• Finished foods and ingredients
• May purchase soybeans from sorting/cleaning operations
Value Added Agriculture Program
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SummaryStatistics
nAnnual
Capacity(MM bushels)
Annual OilProduction
(MM gallons)
BiodieselMax AnnualProduction
(MM gallons)
Crush plants 13 436.5 610.0 488.0
Expeller plants 11 17.0 17.4 13.9
Milling and Soyfoods
9 3.5 n/a n/a
Total 457.0 627.4 501.9
Iowa Soybean Processing Capacity
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Iowa Biodiesel Productionn mgy % 2007
SB oil
Operation 14 318 65.4%
Construction 2 35 7.2%
Subtotal 17 353 72.6%
Planned 14 485 99.6%
Total 31 838 172.2%
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What Could Corn Oil Add?
Grain Yield Oil Yield(bu/acre) (lb/acre)
Soybeans 52.0 567Corn 175.0 350
2007 Avg. Yields10.9 lb oil/bu soybeans 2.0 lb oil/bu corn
Assume 7.8 lb/gal oil and 80% biodiesel yield8.36 mil ac soybeans; 13.95 mil ac corn
Value Added Agriculture Program
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What Could Corn Oil Add?Max. Oil Biodiesel(MM lbs) (MM gal)
Soybeans 4743.9 486.6Corn 4882.6 500.8
9626.5 987.4
Operating + Construction 353 35.8%Planned 485 49.1%
838 84.9%
Assume 7.8 lb/gal oil and 80% biodiesel yield8.36 mil ac soybeans; 13.95 mil ac corn
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What About the Acreage Split?
Corn/SB Max Biodiesel
(billion bu) (million gal)
2006 2.05/0.51 980.7
2007 2.44/0.44 987.3
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What About the Acreage Split?DDGS SBM Protein(mln ton) (mln ton) (mln ton)
2006 17.43 11.25 9.92007 20.75 9.77 10.1
Issues: Protein quality (amino acids)Energy content (starch, oil)
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Concerns for the biodiesel industry
• Adequate supply
• Speculators driving prices higher
• Markets for glycerin
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Concerns for the organic/IP processors
• Challenge to increase acres (or maintain)
• Erosion of non-GMO germplasm
• Training needs for new growers
• Imports from China will take over markets– Group certification of farmers in China
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Acknowledgements
• Iowa Grain Quality Initiative www.iowagrain.org
Special thanks to: Robert Mortensen, Value Added Agriculture Program
Andy Larson, ISU Sustainable Agriculture Program
Value Added Agriculture Program
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Contact informationIowa State University Extension
Value Added Agriculture Programwww.iavaap.org or www.agmrc.org
Connie Hardy [email protected] Hansen [email protected]
Iowa Grain Quality Initiativewww.iowagrain.org
Howard Shepherd [email protected] Hurburgh [email protected]
