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Talking Turkey on Ethanol, Distillers Grains

May 13, 2011

           

On May 10, the RFA released an extensive analysis of the U.S. ethanol industry's production of distillers grains, corn gluten feed, and corn gluten meal - the livestock feed co-products of the grain ethanol process. In it, we detailed not only the size of the distillers grains industry, but the science behind its production and its value in livestock feed rations, overall corn markets, and feed export opportunities. Predictably, the  turkey industry responded by dismissing the contribution of distillers grains and once again calling for a return to corn prices below the cost of production and thus triggering federal farm support payments (by the way, this study from Tufts University shows that major meat producers—not crop farmers--are the main beneficiary of farm payments).  Notably, the beef and dairy industries, which use the lion's share of distillers grains, haven't raised any concerns with our report. But the National Turkey Federation, whose members are also substantial users of ethanol feed co-products, attempted to "cry fowl." As usual, the rhetoric in their attack of ethanol feed production is quotable, but it is far from defensible.  Here are few of the more questionable claims made to an OPIS reporter by lobbyists for NTF: NTF CLAIM: "You cannot compare feed that comes directly from corn and distiller grains." NTF CLAIM: "It is like saying vinegar is fine wine; it just does not work that way." Our response:
  • A recent exhaustive literature review by Dr. Kristjan Bregendahl (a former Iowa State University animal science professor and currently a nutritionist for a commercial poultry operation) found, "Corn DDGS and other distillers co-products are valuable sources of energy and nutrients in poultry diets."
  • Similarly, Dr. Sheila Scheideler at the University of Nebraska says, "Distillers dried grains and distillers solubles have been regarded as good sources of vitamins and protein for poultry diets despite known deficiencies of particular amino acids and sometimes an abundance of fiber."
NTF CLAIM: "...ethanol manufacturing process changes the corn - it removes nutrients." NTF CLAIM: "The distiller grain added back to the feed supply does not have the same nutritional content." Our response:
  • It is true that some of the energy content of the original corn is removed when the starch is used for ethanol. However, other nutrients are not "removed" or "changed." According to Bregendahl, "DDGS contain all the nutrients in corn grain except most of the starch, which has been fermented to ethanol and carbon dioxide. By removing only the starch, the nutrients in corn grain are concentrated about three times in conventionally processed DDGS."
NTF CLAIM: "...distiller grains can be added to turkey feed rations in very limited quantities." Our response:
  • University nutritionists and commercial feed formulators have regularly stated that turkey rations can contain 10-20% DDGS. Research by University of Minnesota nutritionists found "...performance of turkeys fed 20% DDGS diets was not different from (diets without DDGS)..."
  • Bregendahl states, "It is evident...that DDGS from fuel-ethanol production can make up a substantial portion of diets for broiler chickens, turkeys, and laying hens, provided the diet supplies all the nutrients in the right amounts and proportions."
  • Some studies (e.g. Pineda 2008) have examined using very high levels of DDGS (up to 70%) in poultry diets, and concluded that it is possible to use high levels in the poultry diet under certain conditions.
  • Further, while DDGS are not typically used at high concentration levels in poultry diets, they regularly constitute up to 40-45% of the diet for beef cattle and 20-30% for dairy cows. That means corn is being displaced from cattle rations and made more available for poultry feeders.
NTF CLAIM: VEETC "...allows [ethanol producers] to outbid competitors for corn and can artificially raise U.S. corn prices. It's time these government policies are fixed because the consumer is ultimately the one that gets hurt in the end with higher food prices." Our response:
  • According to a new report [link] from Iowa State, only 8% ($0.14/bushel) of the increase in average corn prices from 2004 to 2006-2009 can be attributed to the existence of VEETC and the RFS. Further, the authors write that, "Corn prices without the ethanol subsidies would have averaged only 4% less over this period than what they were."
  • Because VEETC's contribution to corn prices was so small, the impact on food prices was even smaller. The authors write that the relatively small change in corn prices "...necessarily implies that the contribution of ethanol subsidies to food inflation is largely imperceptible in the United States."