Transcript Update Of Ethanol And Soy Processing

Value Added Agriculture Program
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
www.iavaap.org
Value Added Agriculture Program
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 coproduct handling/marketing.
Measure impacts of growth on the ethanol
and soy processing industries and on their
input supply chains.
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Value Added Agriculture Program
Operating plants
137 Plants in USA
in 26 states 7.59 BGY
27 Plants in Iowa 2 BGY
Construction/expansion
68 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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Value Added Agriculture Program
Iowa Ethanol Production and Corn Usage
n
Ethanol
Produced
mil gal/yr
Corn Used
mil bu/yr
DGS
000 tons/yr
24
1,640
591
5,021
Plants, expansions
18
under construction
1,410
503
4,280
Wet Mills
7
1,210
436
3,704
Nearby, Iowa
Draw**
6
402
144
1,220
Summary
Statistics
Current Dry-grind
Plants
Subtotal
Announced
Total
55
27
82
4,662
2,523
1,674
901
7,185
14,225
7,659
2,575
*Operating at rated capacity.
**Plants in bordering counties of other states with 50% use assigned to Iowa corn.
21,884
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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
Feeds Use
Taiwan
75% Cattle
Japan
20% Swine
China
5% Poultry and other
Morocco
(Meat goats, too!)
Costa Rica
EU (approved GM crops in 2006 production; not ’07)
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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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Value Added Agriculture Program
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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Value Added Agriculture Program
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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Value Added Agriculture Program
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
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Source: Google 2007
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Value Added Agriculture Program
Iowa Soybean Processing Capacity
n
Annual
Capacity
(MM bushels)
Annual Oil
Production
(MM gallons)
Biodiesel
Max Annual
Production
(MM gallons)
13
436.5
610.0
488.0
Expeller plants 11
17.0
17.4
13.9
3.5
n/a
n/a
457.0
627.4
Summary
Statistics
Crush plants
Milling and
Soyfoods
Total
9
501.9
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Value Added Agriculture Program
Iowa Biodiesel Production
Operation
Construction
Subtotal
Planned
Total
n
mgy
14
2
17
14
31
318
35
353
485
838
% 2007
SB oil
65.4%
7.2%
72.6%
99.6%
172.2%
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Value Added Agriculture Program
What Could Corn Oil Add?
Soybeans
Corn
Grain Yield
(bu/acre)
52.0
175.0
Oil Yield
(lb/acre)
567
350
2007 Avg. Yields
10.9 lb oil/bu soybeans
2.0 lb oil/bu corn
Assume 7.8 lb/gal oil and 80% biodiesel yield
8.36 mil ac soybeans; 13.95 mil ac corn
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Value Added Agriculture Program
What Could Corn Oil Add?
Soybeans
Corn
Max. Oil
(MM lbs)
4743.9
4882.6
9626.5
Operating + Construction
Planned
Assume 7.8 lb/gal oil and 80% biodiesel yield
8.36 mil ac soybeans; 13.95 mil ac corn
Biodiesel
(MM gal)
486.6
500.8
987.4
353
485
838
35.8%
49.1%
84.9%
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Value Added Agriculture Program
What About the Acreage Split?
2006
2007
Corn/SB
(billion bu)
Max Biodiesel
(million gal)
2.05/0.51
2.44/0.44
980.7
987.3
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Value Added Agriculture Program
What About the Acreage Split?
DDGS
SBM
Protein
(mln ton) (mln ton) (mln ton)
2006
2007
17.43
20.75
11.25
9.77
9.9
10.1
Issues:
Protein quality (amino acids)
Energy content (starch, oil)
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Value Added Agriculture Program
Concerns for the biodiesel industry
• Adequate supply
• Speculators driving prices higher
• Markets for glycerin
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Value Added Agriculture Program
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
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Value Added Agriculture Program
Contact information
Iowa State University Extension
Value Added Agriculture Program
www.iavaap.org or www.agmrc.org
Connie Hardy
[email protected]
Ray Hansen
[email protected]
Iowa Grain Quality Initiative
www.iowagrain.org
Howard Shepherd
Charles Hurburgh
[email protected]
[email protected]
www.iavaap.org