This article first appeared in the December 2015 issue of Drovers CattleNetwork.

Without question, distillers’ grains (especially wet or modified), co-products of corn ethanol production, have been the most popular byproducts ever introduced to the cattle industry. Recently, there have been several changes in some of these byproducts that have made both nutritionists and cattle feeders nervous.

I’ve asked Tom Peters, a successful feedlot consultant working primarily in the “ethanol belt,” to discuss these changes and his thoughts on their short- and long-term ramifications.

-Kenneth Eng

Tom Peters

Many finishing cattle have relocated into the Corn Belt/Ethanol Belt during the last decade. This cattle movement can mostly be attributed to the available supply of inexpensive corn distillers’ co-products. My clients have prospered from including distillers’ grains in diets. I consider modified distillers’ grains (MDGs) and wet distillers’ grains the most complete co-product available for feeding cattle.

However, one questions if the future inclusion rate of distillers’ grains into finishing diets will decline and eventually be eliminated from cattle diets? The cost of ethanol co-products and quality of these co-products as further extraction of nutrients occurs make distillers’ grains increasingly difficult to justify. At the rate nutrients are being extracted and the liability of the residual phosphorus we are purchasing, one questions if MDGs will eventually be considered just a “ration-tempering agent” or a protein source for finishing cattle?

Cost of distillers’ co-products has escalated during the last several years, and I conclude that 2016 will be the first year I will eliminate MDGs from several of my clients’ diets. The cost is just not worthy for the product we are receiving at many locations.

The natural order

During my career, I have been blessed with great clients who are well informed and knowledgeable cattle feeders. We Midwest feedlots have had a great “journey” during the last decade by accessing MDGs for feeding cattle at a discounted price compared to corn in dollars of net energy for gain, per ton of dry matter. We realize that cattle feeding is an arduous, “full-contact sport.” We also realize that all good things come to an end and that further extraction of nutrients by ethanol plants is their prerogative.

Most by-products available to cattle feeding during the past decades have eventually evolved to future separation of nutrients by the manufacturing plant. As ethanol plants further extract oil and substrates from the distillers’ grains, they continue to export to feedlots the concentrated phosphorus content and added industrial sulfur waste. But the breaking point — whether feedlots can afford this product — may be upon us.

Many ruminant nutritionists are cutting back inclusion rates of MDGs to minimal inclusion levels to provide for ruminant protein needs. It is senseless for feedlots to purchase MDGs that are over-priced after accounting for cost of drying corn, transport and basis of dry corn to terminal points, moisture and shrink content of MDGs, spoilage and handling costs of MDGs, added moisture to diet products and cost of money transfer, if there is little economic advantage.

Conversely, during the rapid growth stages of new ethanol plants, feedlots had the “luxury” of lifting the phone and having 35 to 50 percent of their as-fed feedstuffs delivered daily in the form of MDGs, often at discounted prices compared with corn. This luxury prevented many feedlots from annually stockpiling feedstuffs in the form of corn silage, high-moisture (HM) corn or dry corn. We have become dependent on this ability to have these products delivered just in time, so we have stored smaller inventories of the aforementioned feedstuffs. This is now changing at most of my feedlots, as I have encouraged them to increase corn silage and HM corn stockpiles for the upcoming year so we are not as dependent on MDG fluctuation of supplies and prices.

Chasing a rabbit

Kenneth Eng asked me to address changes occurring with distillers’ grains and predict changes that may occur in the future. I digress by remembering my first acquaintance with him. In 1995, we were both asked to present data/papers at the Oklahoma Intake Symposium. We have been great friends and comrades since, resulting in many pontifications and discussions involving all aspects of the cattle industry — past, present and the future. Eng explained to me the “migration” of cattle feeding in the United States, pointing out cattle “follow the by-products of best value.”

As a consulting nutritionist mostly practicing in the northern United States and Midwest, I have included MDGs and other by-products, such as gluten and syrup. I doubt if any consultant has included MDGs into as many cattle-finishing diets as I during the revolution and expansion of the corn ethanol industry. My clients access over 35 ethanol plants. I also am blessed to have many clients around the world finishing cattle and realize that most feedlots have access to some type of high-quality byproducts.

This article is not intended to discuss “if or if not” byproducts and/or co-products should be included into cattle-finishing diets and inclusion rates for optimal performance, but rather to discuss the changes occurring to MDGs and other ethanol co-products.

Ethanol co-products (specifically MDGs) are rapidly changing and have “evolved” in some plants more swiftly than others. Since there are several differing platforms in design of ethanol plants, further extraction of oils, minerals, proteins and fiber is occurring at differing rates. Just recognize as a producer that there are profound differences between plants!

Most feedlots and many consultants just consider the differences in dry matter of MDGs between plants. My metrics show that there are significant differences not only between ethanol plants’ MDGs, but in some plants within daily production runs.

Ethanol co-products have changed since inception of the industry. Since almost 50 percent of U.S. corn production is used for ethanol production, the residual co-products (MDGs) have been used as an energy or protein source by the feedlot industry, right from the start.

Fred Owens and Alfredo DiCostanzo presented a paper entitled “Ethanol co-products: Changes in the last 15 years — Changes to come” at the 2015 Plains Nutrition Council. This paper is an excellent document that should be reviewed by all feedlot nutritionists. The paper eloquently describes ethanol co-products, production steps involved in ethanol production, products/nutrients being extracted currently from MDGs and future products/nutrients that are targeted for extraction from MDGs. The paper quantifies cattle growth responses when MDGs are included at various levels within cattle-finishing diets.

Owens cited a study that identified ethanol plants marketing dried distillers’ grains (DDGs) with greater than 10 percent fat has declined from 50 percent to 17 percent from 2011 until 2015. Furthermore, DDGs/MDGs produced that contain less than 7 percent fat increased from 4 percent to 30 percent throughout the ethanol industry. These are significant changes of DDG/MDG that must be considered in cattle diet formulation and procurement cost!

A poster presented by Alex Hobertz, at this same conference, outlined a statistical approach to examining the impact of varied fat concentration of DDGs/MDGs on co-product net energy for gain (NEg) values. The bottom line is each 1 percent decrease in concentration of fat in DDGs decreases NEg by 2 Mcal per hundredweight. These figures are similar to energy estimations provided by Pritchard, et al. (2012) from a steer-finishing trial.

A major contention this nutritionist shares with colleagues is many ethanol plants do not readily reveal the level of fat extraction from their DDGs or MDGs. The data from these researchers shows the imperative that MDGs buyers thoroughly familiarize themselves with ethanol plant co-product analysis.

There has been a plethora of research gathered during the last decade addressing ethanol co-products when fed to feedlot cattle. Many land-grant universities have been involved in research evaluating MDGs, especially the Universities of Minnesota and Nebraska. Realize that countless studies (and thus taxpayer dollars) prior to the advent of ethanol production were conducted and published concerning feeding cattle with corn, hay, fat and supplement. The industry does know how to feed cattle without including MDGs in finishing diets.

However, let me again say, in my opinion, MDGs combined with HM corn or dry-rolled corn in finishing-cattle diets may be the greatest low-starch co-product ever available.

Next month, we’ll evaluate the pros and cons of including MDGs into finishing-cattle diets.