The Role of Animal Agriculture in the Bioeconomy

Allen TrenkleIowa State University

Historical Background of BiofuelsMid-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 cornEarly-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 productionLate 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 livestock3. 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 thanpast 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

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Use of Corn (2005-2006)

Ethanol Production in IowaDry-Grind Plants

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Total

Number of plants 26 21 47Ethanol, bil gal/yr 1.7 1.6 3.3Corn used, mil bu/yr 607 571 1,178DGS produced, mil ton DM/yr 4.86 4.57 9.43Cattle 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 problemDry DGS is a commodity feed and can be movedPlants have dryers so wet DGS priced on dryLow 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 ProductionImplications 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 useof 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• Develop perennial crop – Switch grass

▫ Increase competition for use of land available for grazing or production of grain

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 agricultureOctober 12, 2007 – A broad coalition of organizations representinganimal agriculture urge congressional leaders to opposeincreasing RFS for grain-based ethanol

2. Livestock industries coordinate with production of biofuelsand 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 producers2. Develop coordinated food and energy systems

• Produce food(s) and energy3. Improve net energy balance of the coordinated system4. 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 ProductionIowa

Corn Ethanol Fuel DGS

Feedlot FoodCH4 Identified markets

Fertilizer Branded products Manure

AnaerobicDigester

Future: Use CO2 from ethanol & digesterGrow algaeSynthetic genomics – synthetic cells

Feed wet DGS• Save energy for drying DGS• Recycle water as wet DGS

Benefits of Manure as Fertilizer• Stop importing P & K• Reduce N imported

Benefits of anaerobic digester• 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

Group Number

WaterMil gal/yr

Cows 2,650 9.91a

Replacement heifers 1 yr 385 0.71

Replacement heifers 2 yr 385 0.95a

Feedlot 2000 5.76

TOTAL 17.33

Beef Herd to Support Feedlots1000 Head Feedlot Turned 2 x per Year

aCorrected for water intake from pasture.

○ 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

Feeding Wet DGS Recycles WaterWet DGS (32% DM)

Integrating Cattle and Ethanol Improves Net Energy Biofuel energy/Petroleum energy

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Based on EBAMM model University of California-Berkeley

Benefits1. Reduce use of commercial

nitrogen fertilizer2. Greater value of DGS3. Reduce use of natural gas

Feed wet DGS

Dependent on feeding high levels of wet DGS to cattle How much can be fed?

+ Cattle + Cattle + Digester

Effects of Feeding Wet Distillers Grains on Carcass Measurements – Steers and HeifersFour Experiments

Control Medium HighEnd live wt, lbs 1294 1306 1290Daily gain, lbs 3.28 3.48 3.34Feed/gain 6.13 5.70 5.64Carcass wt, lbs 792 806 788Dressing % 61.1 61.9 61.4REA, sq in 14.0 14.3 14.0Backfat, in 0.42 0.44 0.40Call YG 2.20 2.28 2.12

Medium = 20 or 28%, high = 40% wet DGSAOV: ADG P < 0.04, Dress % (P < 0.05)Bonferroni t-test: No significance

Steers Fed Modified Wet Distillers Grains(52% DM)

% DGS, dry basis0 24.9 47.0

Feed DM, lbs/d 20.5 21.1 19.4Gain, lbs 3.70 3.68 3.56Feed/gain 5.56 5.75 5.44Carcass wt, lbs 848 856 840Marbling score 548 551 527% Choice 83.3 77.8 71.7Carcass value, $ 1168 1176 1130Cattle: 690 lb steers fed 186 days, implanted 2 x. Carcass value basedon premiums and discounts. DGS 52% DM.

DGS 1.0 x Corn

Corn, $/bu

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Control 24.9 % DGS47.0% DGS

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Control24.9% DGS47% DGS

Net IncomeSteers Fed Modified Wet DGS

Net income from feeding 690 lb steersa corn-based diet or modified DGS.

Net income based on carcass value andrelated to price of corn and DGS (as% of corn price).

Steers and Heifers Fed Modified Wet DGS(52% DM)

% Modified DGS on dry basis0a 20a 40a 60b

Steers (830 lbs) 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 6.53Heifers (725 lbs) 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 6.87aFed 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

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Steers 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

Heifers 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 1150Carcass value based on premiums and discounts.

Net IncomeHeifers Fed Modified Wet DGS

Net income from feeding 725 lb heifersa corn-based diet or modified DGS.

Net income based on carcass value andrelated to price of corn and DGS (as% of corn price).

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Corn, $/bu

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Net IncomeSteers Fed Modified Wet DGS

Net income from feeding 830 lb steersfed a corn-based diet or modified DGS.

Net income based on carcass value andrelated to price of corn and DGS (as% of corn price).

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Steers and Heifers Fed Wet DGS (32% DM)2007 Experiment (Preliminary data at 84 days)

% Modified DGS on dry basis0 20 40 60

Steers (812 lbs) 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 5.01Heifers (712 lbs) 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 5.23Control 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 Up to 60% of dry matter intake Satisfactory performance of the cattle can be maintained

2. Effects on carcass quality can be managed Feeding high levels of DGS seems to decrease marbling to

some extent3. 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 co-

product

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