October 6, 2011

Ethanol Industry vs Cattle Industry - Part I -Introduction to My Opinion

Now that weaning is over.  I have decided to start a new series on a topic that is near and dear to my heart.  Inspired to come out a little earlier than I originally anticipated.  I was going to start on a series on harvesting as the combines are running hard right now but that will have to wait. 

I am very passionate and 100% certain that the expansion of the Ethanol Industry is NOT 100% bad for cattle producers and it is NOT the SOLE reason why our feed costs have gone higher in recent years along with the cost of everything else (groceries, fuel, cloths, fertilzer, other ag chemicals).  There is a dynamic around these price increases that is greater than I even grasp.  I am passionate about the expansion of the ethanol industry for many reason.  Maybe the 1st and most important is I am an employ of the ethanol industry and that off farm income helps us pay the house hold bills at our farm.  We are in an economy where jobs are hard to find and the ethanol industry has increased the number of jobs for Americans and they pay a very competitive wage at all levels of employment.  Not to mention most of these jobs can not be out sourced (someone has to be in America to fix a broken pump or motor).  I got my graduate degrees from the University of Nebraska which is 1 of the leading Land Grant Universities in distiller grain research in the beef industry.  We are also a users of distiller grain at our farm and have seen the benefits it brings to my farm as well as my customers for cow, calf, and feedlot diets not just economically but overall herd health.  So I have a lot of ties to distillers grain (no wonder I might be a little bias in my opinion) and if we lost the ethanol industry I am not sure what feed source we would find to replace it.  Please keep in mind these are my opions and beliefs backed up by research, first had experience with feeding distillers, close out numbers from our farm and some of my customers, and feed back from my customers.

Wet Distillers Grain

My plan for this series it to talk about how the ethanol plant turns corn into both ethanol and distillers grain, what is distillers grain and the different forms/types, the benefits to the diet of cattle, what it has done to our herd since we started using it, get some feed back from other producers who use it (I have access to lots of them) both long time users and new users.  I might even talk to some corn farmers that sell corn to ethanol plants and get their opinion on what it has done for their business.

Dry Distillers Grain

Because I know the bottom line might be the most important part to some of you readers.  Here is a sneak peak at some feeding economics!!  More details to come later!
This is the cost/cow/day, feeding to provide 1/4 of supplemental protein.  I included the cost of the supplemental protein source, and the cost of hauling these feeds 100 miles to the ranch (doesn't include mineral or forage) exept for the DDG pellet the closest place to get it is about 70 miles further away, the others I can pick up within a 10 mile radius.  I want to be fair and the extra hauling on 1 product is a real cost that needs to be included (the extra 70 miles added 1 cent/cow/day).  I priced all of them today.
DDGS Meal (dry distillers grain) - $0.11
DDGS Pellet (80% DDG 20% Soy Hull) - $0.13
Corn (ground) - $0.29
Range Cubes (30% CP) - $0.15

Compare the cost for 100 cows for 60 days:
DDGS Meal - $660
DDGS Pellet - $780
Corn - $1740 
Range Cube - $900

Feeding DDGS meal is 38% less $$ than corn.  Next post will start at the beginging of the process!

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