Transcript
Speaker: Hi, everyone. Welcome to the Feeding Grain podcast. And thank you for listening. My name is Stephen Kilger, managing editor for Feeding Grain and your host. We have a great show for you today. Kurt Schulz, Senior Director of Global Strategies at U .S. Grain Council. Stop by to talk about two new initiatives the council has going on. A new handbook with information on the new variety of high protein DDGs popping up on the market. And then we talk about a few new studies on the value of U .S. corn over its competitors.
Speaker: But before we get going on that, if you're listening to the podcast and podcasting app, please consider subscribing and or leaving a rating or review. It would help us out a lot. Thank you so much for listening. On to our conversation with Kurt. Well, hi Kurt. Thanks for talking to me today. Yes, sir. It's good to see you again, Steve. Good to see you too. It's been a few months. It's always nice to have you as a guest. Hopefully you'll be back many more time.
Speaker: That's the hope. That's the hope. As long as we have something interesting to pass along, I'm happy to be on the show. Speaking of industry, you guys just released a new handbook on high protein corn products produced in the U .S. ethanol industry. I think mainly what we would call DDGs. Can you talk a little bit about what motivated you to release that handbook and tell us a little bit about the handbook itself? Yeah, let me step back a little bit. The U .S. Grains Council represents the U .S. corn industry.
Speaker: but focused primarily in our international audience. So we are the marketing arm for the US industry representing farm growers across the United States. And so we've been active since 1960. However, probably around 2003, 2004, we became involved in educating international buyers about a new product called Distillers Grains, DDG.
Speaker: And that was a relatively new product back in 2000 and early 2000s for the US industry, but also for international customers.
Speaker: And so we spent a lot of time in the last, let's just say the last 20 years really promoting the product, but also educating nutritionists for dairy, for swine, poultry, even aquaculture about the value of DDGs and the feed ration. And it competes with other raw materials, but really the value that it creates is it may in certain opportunities allow them to lower the cost of their feed ingredients and also diversify their product mix.
Speaker: So you spread your risk across different products. And so that was the early phase of our education program. And we saw DDG exports really go from zero tons to now we're at about 11 to 12 million metric tons of DDG exports going to over 50 countries worldwide. And that's really driven by this education effort that the council does through its consultants and staff that are working overseas.
Speaker: So newer evolution has become in the industry and that's is that the ethanol industry is now looking at producing higher value products. The technology has changed. It allows them to further ferment or concentrate the Stuller's Grains into products that have even higher and very different values. DDGs in general was kind of lumped into a standard product in the past.
Speaker: Now they're coming out with what we would call high protein DDGs, corn fermented proteins. There's a variety of different names, but essentially the protein value of the DDGs is almost doubled. It's not, in some cases quite a bit higher. So with that increase in protein level, it changes how this corn fermented protein product is being utilized.
Speaker: Our new booklet is really intended to adapt to the changes that we're seeing in the industry and to not only educate ourselves and our staff who then have to take that message out and talk to our customers internationally. And each company that markets this is going to have a slightly different product. So there may be five to 10 different varieties of products based on
Speaker: whether they have, you know, the protein levels or whether they add yeast to the product that has certain nutritional profiles that changes the product mix. And so that booklet that we just released is really in our first attempt to start to dive into this space and start to build an excitement about a new product and how to use it in these different animal species.
Speaker: Yeah. I've seen that news. It's a pretty expensive piece of it technology, but ethanol plants are investing in it. And I saw even in the last couple of years, a few more came out, which seems to be a bit of a game changer. We talk about DGs, huh? Yeah. Early in the industry, DGs were seen as a by -product and they're really focused their financial profitability on the ethanol side of things. And now.
Speaker: I think you see DDGs and the coal products being just as important in the profit portfolio of these ethanol companies. And so it is evolving very quickly and it's more efficient. The energy value more of it's being converted into ethanol. And so these plants are increasing their efficiency.
Speaker: These new products have a new market opportunity, which is a lot of them are in aquaculture. We'll use a higher protein product, similar to soybean meal. And you also see that going into poultry and layer rations. And so just understanding how these products fit and then.
Speaker: And certainly the companies internationally, as they start to buy them, they can talk to their supplier and get even more specifics about the recommendations. But it's really an education to show this evolution. And we already seen exports. We've seen export into Mexico and to even into West Africa. We did an initial project there and we've already been able to sell some of this corn fermented protein into West Africa and containers. And so, and certainly Southeast Asia and the Asian markets are really excited by this. So it is.
Speaker: Something that I think we'll see more and more interest as years go forward. Lee and always great. Anything we can do to get more value out of the product, right? Increase our own sustainability footprint for the industry as a whole is always good. So what information does the high protein handbook have in it for both foreign buyers and also maybe even people in the domestic market might be interested in kind of looking at. One, I would just say that a handbook is on our website at grains .org.
Speaker: And broad brushes to describe it is there's a overview of the different types of products that are being produced. Certainly not comprehensive. I would just say it is a primary products that we're seeing in the market. And then it goes through the advantages or the, the characteristics of each of them. And I think the bulk of the book focuses on the different animal species. So poultry, swine.
Speaker: cattle, aquaculture, what would be the ways to use these products at what levels and how does that mix in and replace other ingredients? What's not there and ultimately is up to the nutritionist is that there's a feed formulation where they put in the cost of the ingredients and their nutritional characteristics. And then that system tells, makes recommendations based on price and nutritional profile. So it's really just a guide for the end user.
Speaker: depending on the species that they're looking at. For the domestic audience, it's very similar. The information and the utilization is very similar. It's just certainly of use for the domestic audience. The Grains Council makes it available to any audience that's interested in looking at it, but it's
Speaker: Our focus is primarily being able to provide that resource to international buyers that are meeting with exporters and trying to get a better handle on what kind of products are out there. That's great. Is there information on other corn co -products in the book or does it strictly focus on DDGs?
Speaker: It's strictly on DDGs. And we have other handbooks up there, an older version of the DDGs that were 23 % protein. The earlier versions are up there. And then we certainly have information on corn gluten feed and corn gluten meal and other guidebooks. But this is specific to the new evolution of distillers grains that's out there.
Speaker: Yeah. Well, it's a great note though that let people know that there's actually a wealth of information you guys have on your site for all kinds of products. I also hear that you guys are doing some research in the U .S. corn profitability versus some foreign suppliers. Can you go a little more with the details into that? There's two aspects to this study and it really came down to trying to differentiate U .S. corn against corn from other suppliers.
Speaker: One of the complaints, I guess, has been that the U .S. corn tends to be a little bit older because we store it and we have a much longer export system where the grain could start up in the upper Mississippi and be handled several times as it comes down the Mississippi River and then is loaded into vessels and dropped from heights. And so there tends to be a little bit more stress cracks and broken material in the corn.
Speaker: And for years, we've been trying to figure out how to address that because for the foreign customer, their O's will look and say, well, US corn tends to be a little more dusty than Argentinian and Brazilian. And it was more of a visual aspect. There are other issues that have to deal with handling and storage of the grain.
Speaker: And so my question has always been, well, how does it perform? Because ultimately you're going to grind that grain and put it into chicken or swine feed and you're going to pelletize it. So you're, you know, there is some broken corn, but it's essentially a starch product that's in the grain. But with that kind of background, we started a project and it's on two aspects. The first one was.
Speaker: We looked at it for the industrial starch industry, which is a very large industry. It produces some of the food starches that we use. There's a lot of chemicals produced that are used in the pharmaceutical and other industries. It's a very sophisticated industry. And it's similar to a chemistry project where you add corn into a steeping tank and you extract the different aspects of the corn.
Speaker: and what you put in, you get out in some other form. And so we re -imported corn samples from the United States, but they were out from our customers overseas. We went to plants in Egypt, in Korea, in Colombia, and we sent US corn, Argentinian corn, Brazilian corn, Ukrainian, and even Indian corn
Speaker: from the warehouses of our customers to the United States and have them analyze. So essentially they were taking corn that they had received and said, let's see how those yields, those different varieties will form. And we've done two years of studies and we're in the middle of our third year of this study at the University of Illinois. And the results have come back that US corn yields three to 4 % higher yields of available starch
Speaker: than other origins. And that has to do with US corn being softer, it's less bound up in a protein matrix. And as a result, these plants can increase their profitability significantly by using solely US corn. And just to use an example, a starch plant that uses about 1000 tons of corn a day, which is my understanding is about a mid -size plant,
Speaker: For every percent of yield increase in starch, 1 % yields to a million dollars per year of additional profitability. So if you're getting 3 % yield increase, you're getting $3 million additional profit if you were just to use 100 % US corn. And this has really a significant impact because there are probably 40 some plants internationally.
Speaker: that starch plants, not all of them are able to import US corn because they could be in the middle of a landmass where it's hard to get access to US corn, but of those that could get access to it, they could increase their profitability simply by using US corn over other origins. The second aspect that really is exciting and even more significant is that
Speaker: There's an initial processing time that it's called steeping. You have to stick the corn in a water bath, so to speak, with some chemicals to kind of break it apart, similar to cooking. And in that process, U .S. corn steeps only 24 hours versus you need 48 hours for Argentinian, Brazilian, or Ukrainian.
Speaker: Once you get through that first phase, you can double the throughput through your plant of using US corn because you don't have to be locked up in that initial phase with a lot of space occupied with a second day of steeping of the corn.
Speaker: We're really excited about this. We're actually having a conference next week in Korea with a global starch industry and presenting these results. And really the goal is to get them to start to buy and prefer U .S. corn over other origins. That is one area that's really exciting. The second one, so we thought, well, if it does that in the industrial side, is it possible to do it in the feed side?
Speaker: And so we actually went to a feed miller in Colombia, feed plant, and got five tons of US Argentinian and Brazilian corn and re -exported it back to the United States. We build the corn from each of these origins and then fed them in swine and in poultry rations. We've done the first year of the study. We got the results. We're doing a second year because you always want to try to take out that variability of crops change based on the productivity conditions and things like that.
Speaker: The first year of data, US and Brazilian corn were equal. And I'm going to focus on the poultry aspects of it because results on the swine were pretty much the same also. But where we found the interesting results were on the poultry side. US and Brazilian corn were relatively equal in feed conversion rates for chicken.
Speaker: But in US and Argentinian, we found that the US, the feed conversion rate, which is really how much feed do you need to feed the chicken to get one kilo of growth, was higher for US corn. And so, I'm sorry, it was lower. So a lower feed conversion rate means you get faster growth at a lower volume of feed. So we had a lower feed conversion rate and, you know, it's a small number. It's the 100th, like it's 1 .402, something like that.
Speaker: but we had enough when you put that into a commercial operation if you look at a culture operation that produces over a million birds a week and so this is a large company in the scale of tysons or some of these other large poultry producers if they feed 100 percent us
Speaker: corn versus Argentinian. At the end of the year, they'll have over $400 ,000 of additional profitability because essentially what they're doing is each individual bird is a small amount, but when you add up a small amount of growth,
Speaker: across a lot of birds, it translates into real financial savings. And so we're doing a second study this year, as I mentioned earlier, with Auburn University to do the poultry study. And we're going to do with South Dakota State University, a swine study. Again, the idea along with the starch study is, is that that starch is in the corn kernel is the same for each origin, but it's easier to digest in the U .S. corn.
Speaker: And what's important in an animal diet is protein and energy. And if you can get those two components.
Speaker: easily digestible and they don't go out as waste products, then the animal gets the maximum benefit from that and the farmer or the producer gets the more productive animal. So those are really focusing on financial benefits of using US corn so that we can go out and talk about that and really promote the US origin over other origins when we talk to our buyers internationally.
Speaker: Yeah, that's what I love about the U .S. Grains Council. You guys are always doing such fascinating things and really you're doing it for our industry, which is really important work that we're always happy to have you on here to talk about. And ultimately the goal of the Grains Council were an organization we represent individual farmers in essence from Minnesota, from Iowa, from Illinois, Nebraska.
Speaker: And so they're members, they sit on our advisory boards and our goal at the end of the day is not to make the US buyers to look at the US and say, oh, we'll just buy when we need corn from the US if it's available. We want them to go and ask for it and a preference rather than just say, give me what you have. No, I want you to send me US because we see this increased profitability. And our next steps on all of this,
Speaker: We're doing commercial trials in starch. Now we're taking it from the university level to back out to the field this next year and doing commercial trials with industrial starch plants. We have three lined up right now around the world that are willing to work with us.
Speaker: on this and to really show that data and that faster steeping times. And we're going to do the similar thing with the feed industry is to go to international customer and basically do trials that show these animals grow faster and get faster weight gain using U .S. corn versus other origins. And so then that translates, you know, when you start talking money and talking, what does this mean for your profitability? It gets people's attention very quickly.
Speaker: If you say, why U .S. corn because we're good guys? That's okay. That gets you a nice nod and a smile. But when you show what it means to their pocketbook, you get believers very quickly.
Speaker: You'll have to come back and tell us how those studies go and for some other information on what you guys have going on. It's one of my favorite reoccurring columns in the magazine. I think everyone should look at it. Every two months you guys go through and you what you're doing across the world to promote U .S. grains. And it's one of my favorite things to read because it's real world examples of what you're doing out there. So thank you again so much for coming to talk to me.
Speaker: Thank you for your time. And I would just say that you were mentioning reading the column and what we do, but a lot of what we do is take the lessons that we learned in the US and then take them out overseas. And so we really start at the grassroots, the research that we've invested in universities and our professional people become consultants for us. So the US industry, culture industry is strong and has a very.
Speaker: practical knowledge base. And it's a fun part of my job is I'm just taking experts and introducing them to other people and letting them do the teaching. And you guys do so much teaching and that's a big part of what you're doing. Once again, thank you so much for talking to me, everyone out there. Thank you so much for listening and I hope you stay safe out there. Thanks. All right. Bye -bye. Bye.
