Transcript Slide 1

The Role of Animal Agriculture in the
Bioeconomy
Allen Trenkle
Iowa State University
Historical Background of Biofuels
Mid-80’s
• Expansion of wet milling of corn producing high-fructose sugar
• Co-products mostly exported
• Established value of co-products as livestock feeds
▫ Cattle feeders wanted price related to price of corn
Early-90’s
• Interest in ethanol production from dry-grind plants
▫ Slow to develop in Iowa (Developed in MN, NE, SD)
• Established value of co-products as cattle feed
• Promoted integration of ethanol plants and cattle feeding
▫ First Iowa dry-grind plants coordinated with cattle production
Late 2004 to present
• Rapid expansion of building ethanol plants
• Concentration of ownership of ethanol plants
• Co-products evolved as commodity feeds
Changes in Agriculture
1. Animal power to tractors
• From growing fuel raised on farm to importing fuel
2. Crops: Corn-Small grains-Meadow to less crop diversification
• Change to corn and soybeans
• Use of ag chemicals and external sources of energy
• Concentration of livestock into larger units
All farms had livestock to few farms having livestock
3. Next change: Production of biofuels
• Alter expectations of agriculture
• Alter cropping systems
• Alter investments in agriculture
Role of livestock?
The consequences of this change could be greater than
past changes – Is the livestock sector prepared?
Expectations of U. S. Agriculture
1. Production of food – Long-term mission
• High quality
• Safe
• Low cost
2. Production of biofuels – New role
• Liquid fuels suitable for internal combustion engines
• Corn grain is predominant feedstock used for ethanol
3. Livestock production
• Expectations of society not clear
▫ Small vs. Large – Location
• Source of capital
• Might begin moving off-shore
800
7
700
6
500
400
300
Million bushels
600
5
4
3
200
2
Billion bushels
Use of Corn (2005-2006)
Iowa
U.S.
Dairy cattle
Poultry
Beef cattle
Hogs
Export
Processed
0
0
Ethanol
100
Ethanol
Feed
HFCS
Starch
Sweeteners
Cereal
Beverage alcohol
1
Ethanol Production in Iowa
Dry-Grind Plants
Current
New
Production Expand
Total
Number of plants
26
21
47
Ethanol, bil gal/yr
1.7
1.6
3.3
Corn used, mil bu/yr
607
571
1,178
DGS produced, mil ton DM/yr
4.86
4.57
9.43
Cattle inventory neededa
2.08
1.96
4.04
aCould
be feedlot (backgrounding, finish), beef cows, dairy cows,
replacement females. Based on feeding 40 lbs wet DGS/d.
Influence of Biofuels on Livestock Production
1. Competition for feedstock (starch & cellulose)
• Impact on feed prices
DGS has not helped to solve the problem
Dry DGS is a commodity feed and can be moved
Plants have dryers so wet DGS priced on dry
Low energy value of dry DGS for monogastrics
• Develop corn designed for ethanol rather than feed
▫ High starch, lower protein, add amylase
2. Land values
• Cost of land
• Availability of land for grazing
3. Flow of nutrients
• Phosphorus (To some extent nitrogen)
Influence of Biofuels on Livestock Production
4. Effects of feeding DGS on animal health and performance
• Availability of amino acids
• Availability of energy
• Mycotoxins
• Antibiotics
• Sulfur (ruminants)
• High nitrogen intakes
5. Quality and safety of animal food products
• Effects of unsaturated oil
6. Competition for energy and water
• Natural gas – also used by agriculture
• 3 to 6 gal water per gal ethanol – livestock
also use high volumes of water
Use of Biomass for Ethanol Production
Implications for Livestock Industries
1. No assurance more corn will be available for livestock
• Greater cost of producing ethanol from cellulose/hemicellulose
▫ Corn plants have been built – Corn grain will
continue to be used to produce ethanol
• Federal policy would have to direct change in use
of corn grain
▫
Market forces will not cause a change
2. Supply of biomass
• Corn stover is current primary supply of biomass in Iowa
▫
Compete for a feed supply fed to cattle
▫
Increase competition for use of land available
for grazing or production of grain
• Develop perennial crop – Switch grass
3. No co-product is produced that has feed value for animals
• Maybe a protein fraction (Need energy to feed animals)
Possible Consequences of Biofuels
1. Livestock industries remain a competitor for feedstocks
• DGS remain a commodity
• Exacerbate the problems of agriculture
October 12, 2007 – A broad coalition of organizations representing
animal agriculture urge congressional leaders to oppose
increasing RFS for grain-based ethanol
2. Livestock industries coordinate with production of biofuels
and address some of the issues being raised
• Food and fuel
• Net energy balance of producing biofuels
• Sustainability of biofuels production
Economic
Ecologic
• Rural economic development
Opportunities
1. Pricing of DGS for livestock
• Establishing a price for livestock not simple
• Price relative to corn at a price beneficial to livestock
and ethanol producers
2. Develop coordinated food and energy systems
• Produce food(s) and energy
3. Improve net energy balance of the coordinated system
4. Recycle nutrients
• Reduce energy inputs for agriculture production
• Reduce environmental impact of agriculture
5. Grow biofuels and livestock industries in Iowa
Integrated Livestock and Ethanol Production
Iowa
Feed wet DGS
• Save energy for drying DGS
Corn
Ethanol
DGS
Fuel
Feedlot
Food
• Recycle water as wet DGS
Benefits of Manure as Fertilizer
• Stop importing P & K
CH4
Fertilizer
• Reduce N imported
Identified markets Benefits of anaerobic digester
Branded products
Manure
Anaerobic
Digester
Future: Use CO2 from ethanol & digester
Grow algae
Synthetic genomics – synthetic cells
• Reduce use of natural gas
• Conserve manure nutrients
Limitations
• Majority of feedlots not
designed for this system
• Requires extensive
coordination
• Anaerobic digesters not well
developed
Beef Herd to Support Feedlots
1000 Head Feedlot Turned 2 x per Year
Group
Number
Water
Mil gal/yr
Cows
2,650
9.91a
Replacement heifers 1 yr
385
0.71
Replacement heifers 2 yr
385
0.95a
2000
5.76
Feedlot
TOTAL
aCorrected for water intake from pasture.
17.33
Feeding Wet DGS Recycles Water
Wet DGS (32% DM)
○ Growing cattle fed 70% DGS, Feedlot cattle fed 50%
Cows fed 50%, Replacement heifers fed 60%
○ 1000 head feedlot (turned 2x per year)
10.78 mil lbs DGS DM fed per year
3.8% of output of 50 mgy ethanol plant
○ Wet DGS would replace 2.75 mil gal water/yr
15.9% of water requirement of cattle
Water use
○ 50 mgy ethanol plant - 200 to 250 mgy water
○ 26.5 beef units to use DGS from 50 mgy plant - 460 mgy
○ Feed wet DGS: Recycle 29 to 36% of water
used by ethanol plant
Integrating Cattle and Ethanol
Improves Net Energy
Biofuel energy/Petroleum energy
Based on EBAMM model
Net energy, Output/Input
3.5
University of California-Berkeley
3
Benefits
2.5
1.
2
2.
3.
1.5
Reduce use of commercial
nitrogen fertilizer
Greater value of DGS
Reduce use of natural gas

Feed wet DGS
1

0.5
Dependent on feeding high
levels of wet DGS to cattle

0
Ethanol
Ethanol Ethanol
+ Cattle + Cattle
+ Digester
How much can be fed?
Effects of Feeding Wet Distillers Grains on Carcass Measurements
– Steers and Heifers
Four Experiments
Control
Medium
High
End live wt, lbs
1294
1306
1290
Daily gain, lbs
3.28
3.48
3.34
Feed/gain
6.13
5.70
5.64
Carcass wt, lbs
792
806
788
Dressing %
61.1
61.9
61.4
REA, sq in
14.0
14.3
14.0
Backfat, in
0.42
0.44
0.40
Call YG
2.20
2.28
2.12
Medium = 20 or 28%, high = 40% wet DGS
AOV: ADG P < 0.04, Dress % (P < 0.05)
Bonferroni t-test: No significance
Steers Fed Modified Wet Distillers Grains
(52% DM)
% DGS, dry basis
0
24.9
47.0
Feed DM, lbs/d
20.5
21.1
19.4
Gain, lbs
3.70
3.68
3.56
Feed/gain
5.56
5.75
5.44
Carcass wt, lbs
848
856
840
Marbling score
548
551
527
% Choice
83.3
77.8
71.7
Carcass value, $
1168
1176
1130
Cattle: 690 lb steers fed 186 days, implanted 2 x.
on premiums and discounts. DGS 52% DM.
Carcass value based
140
Net Income
Steers Fed Modified Wet DGS
DGS 1.0 x Corn
100
Control
24.9 % DGS
47.0% DGS
80
60
140
40
120
DGS 0.75 x Corn
20
0
-20
2.0
2.5
3.0
3.5
4.0
4.5
Corn, $/bu
160
Net income, $/steer
Net income, $/steer
120
Control
24.9% DGS
47% DGS
100
80
60
40
DGS 0.5 x Corn
20
Net income, $/steer
140
Control
24.9% DGS
47% DGS
120
0
2.0
100
2.5
3.0
3.5
4.0
4.5
Corn, $/bu
80
Net income from feeding 690 lb steers
a corn-based diet or modified DGS.
60
40
20
0
2.0
2.5
3.0
3.5
Corn, $/bu
4.0
4.5
Net income based on carcass value and
related to price of corn and DGS (as
% of corn price).
Steers and Heifers Fed Modified Wet DGS
(52% DM)
% Modified DGS on dry basis
0a
20a
40a
60b
Feed DM, lbs/d
24.3
25.7
24.2
23.2
Gain, lbs/d
4.51
4.74
4.32
3.57
Feed/gain
5.39
5.41
5.60
6.53
Feed DM, lbs/d
22.6
23.0
21.7
20.5
Gain, lbs/d
3.87
3.86
3.65
2.99
Feed/gain
5.85
5.97
5.97
6.87
Steers (830 lbs)
Heifers (725 lbs)
aFed
120 days bFed 169 days.
Control diet 86% corn and supplement, 10% corn silage, 4% tub-ground grass hay.
One combination implant in the cattle on day 1. DGS 52% DM.
Steers and Heifers Fed Modified Wet DGS
% Modified DGS on dry basis
Steers
Heifers
0
20
40
60
Carcass wt, lbs
825
852
830
873
Dressing %
60.3
61.1
61.8
60.5
Marbling score
546
553
531
528
% Choice
87.5
91.7
83.3
70.8
% CAB
37.5
25.0
25.0
12.5
Carcass value, $
1296
1335
1299
1273
Carcass wt, lbs
724
731
714
750
Dressing %
61.0
61.8
61.9
61.0
Marbling score
525
538
521
542
% Choice
79.2
91.7
79.2
91.7
% CAB
16.7
8.3
4.2
12.5
Carcass value, $
1132
1140
1101
1150
Carcass value based on premiums and discounts.
140
Net Income
Heifers Fed Modified Wet DGS
DGS 1.0 x Corn - Heifers
120
Control
20% DGS
40% DGS
60% DGS
Net return, $/head
100
80
60
160
DGS 0.75 x Corn - Heifers
40
140
20
-20
2.0
2.5
3.0
3.5
4.0
4.5
Corn, $/bu
Net return, $/head
0
100
80
60
40
160
DGS 0.5 x Corn - Heifers
20
140
Control
20% DGS
40% DGS
60% DGS
120
Net return, $/head
Control
20% DGS
40% DGS
60% DGS
120
100
0
2.0
2.5
3.0
3.5
4.0
Corn, $/bu
Net income from feeding 725 lb heifers
a corn-based diet or modified DGS.
80
60
Net income based on carcass value and
related to price of corn and DGS (as
% of corn price).
40
20
0
2.0
2.5
3.0
3.5
Corn, $/bu
4.0
4.5
4.5
Net Income
Steers Fed Modified Wet DGS
200
DGS 1.0 x Corn - Steers
Control
20% DGS
40% DGS
60% DGS
100
50
200
DGS 0.75 x Corn - Steers
0
Control
20% DGS
40% DGS
60% DGS
150
-50
-100
-150
2.0
2.5
3.0
3.5
4.0
4.5
Corn, $/bu
180
Net return, $/head
Net return, $/head
150
100
50
0
DGS 0.5 x Corn - Steers
160
140
Net return, $/head
-50
Control
20% DGS
40% DGS
60% DGS
120
-100
2.0
2.5
3.0
3.5
4.0
Corn, $/bu
100
Net income from feeding 830 lb steers
fed a corn-based diet or modified DGS.
80
60
40
20
0
2.0
2.5
3.0
3.5
Corn, $/bu
4.0
4.5
Net income based on carcass value and
related to price of corn and DGS (as
% of corn price).
4.5
Steers and Heifers Fed Wet DGS (32% DM)
2007 Experiment (Preliminary data at 84 days)
% Modified DGS on dry basis
0
20
40
60
Feed DM, lbs/d
18.5
17.8
18.1
17.0
Gain, lbs/d
3.46
3.17
3.51
3.40
Feed/gain
5.37
5.61
5.16
5.01
Feed DM, lbs/d
17.5
17.8
17.4
15.7
Gain, lbs/d
3.22
3.34
3.19
3.01
Feed/gain
5.45
5.33
5.47
5.23
Steers (812 lbs)
Heifers (712 lbs)
Control diet 86% corn and supplement, 10% corn silage, 4% tub ground grass hay.
One combination implant in the cattle on day 1.
Conclusions
1.
High levels of wet DGS can be fed to cattle


2.
Effects on carcass quality can be managed

3.
Up to 60% of dry matter intake
Satisfactory performance of the cattle can be maintained
Feeding high levels of DGS seems to decrease marbling to
some extent
Wet DGS can be priced relative to corn grain

Price should be less than corn grain on a dry basis


Provide economic incentive to cattle producers
Need to allow economic return to ethanol plant for coproduct
Implications
 Integrating livestock with production of biofuels
addresses many of the concerns being expressed





Energy obtained from petroleum energy invested
Food: production/price
Sustainability: environmental/economic
Rural development
Water conservation