1. Biofuel – Fact or Farce HINNER KÖSTER (Ph.D.)

3. Fiber to cellulosic ethanol?? Cellulosic Conversion ??

4. More worries about food versus fuel “Boosting U.S. ethanol production would mean higher food prices, both domestically and across the globe” Dick Bond, Tyson CEO

6. USA Ethanol outlook

7. (25% in 2007/08)

8. (Reach level in 2009/10)

9. New projections – baseline increase

10. CBOT MARCH MAIZE PRICE

14. USA DDGS Production Outlook

15. USA potential DDGS exports Source: The ProExporter Network®

16. Relationship between US Maize and DDGS prices Source: CARD, Iowa State University

17. DDGS Usage ─ All used by livestock (nothing wasted)  Swine ─ 8.7 million tons  Poultry ─ 6.9 million tons  Dairy ─ 16 million tons  Beef ─ 39 million tons Total ─ 70.6 million tons

18. “Biofuels provide us with a historic chance to fast-forward growth in many of the world’s poorest countries, to bring about an agricultural renaissance and to supply modern energy to a third of the world’s population” Jacques Diouf, Director General: UN Food and Agricultural Organisation BIOFUELS SA

19. LEGISLATION IS THE KEY TO BIOFUEL PRODUCTION IN SOUTH AFRICA NO LIKELY DIRECTION IN THE SHORT TERM COMPETITION WITH FOOD? ECONOMIC VIABILITY? HEALTH/ENVIRONMENTAL/ECOLOGICAL AFFECT? JOB CREATION, SMALL SCALE BUSINESS DEVELOPMENT, 2 ND ECONOMY, POVERTY ALLEVIATION? CONTRIBUTING TO NATIONAL FUEL SECURITY? –PRICE, VOLUMES

20. Maize-to-Ethanol: Total Supply Chain Cost Comparison (Source: Absa Agribusiness / Agrista)

21. SOUTH AFRICAN MAIZE CONSUMPTION

22. Impact of Maize Price on Planting Behaviour Source: Safex, Crop Estimates Committee

27. YELLOW MAIZE PRICES RANDFONTEIN Source: Grain SA

28. 1. DOMESTIC PRICES PER SAFEX (R/t) (a) 1. PLAASLIKE PRYSE VOLGENS SAFEX (R/t) (a) Futures prices/Termynpryse (2008/02/15) Commodity2008/032008/052008/072008/092008/12 White maizeR1736.00/tR1655.00/tR1598.00/tR1630.00/tR1679.00/t Yellow maizeR1803.00/tR1706.00/tR1673.00/tR1717.00/tR1728.00/t

29. Ethanol to DDGS

30. Starch 72.6 % Maize Oil 4.3 % Protein 9.8 % NDF 9.0 % Minerals 1.6 % Nutritional Components of Yellow Maize (DM base)

31. Average Yield of Maize in Dry-Milling Ethanol Production Ethanol (40%) DDGS (30%) CO 2 (30%)

32. Ethanol Production (Fermentation process) CO 2 WDG CDS

33. Low in starch Moderate in fat Moderate in protein High in fiber High in phosphorous Nutritional Characteristics of Distillers Grains

34. Maize 85-908-10 7-10 3.5-4.0 DDGS85-9028-3535-4310-12 WDGS30-3528-3535-4310-12 ModDG42-5028-3535-4310-12 CDS25-3520-25 >520-25 Fat level variable: 8-14% dependent on solubles amount S level important to watch P in DGS: 0.75-1.0% P DMCPNDFFat Byproduct composition (%DM)

35. Problem 1 Lysine and Methionine content of DGS vs other protein ingredients

36. Problem 2 – Nutrient Variation - Statistics for range of DDGS samples analysed by NIR- Parameter RangeSamplesR 2 SECV Moisture 2.8 – 16.9 303 0.981 0.57 Protein 23.4 – 38.5 311 0.987 0.53 Fat 6.6 – 12.6 124 0.913 0.40 Ash 3.0 – 6.7 126 0.828 0.39 ADF 9.9 – 13.9 34 N/A 0.65 NDF 28.3 – 32.3 34 N/A 0.81 Crude Fiber 5.4 – 8.2 34 N/A 0.54 Starch 6.5 – 9.5 104 0.653 0.46

37. Comparison of the Nutrient Content of Maize Distiller’s Grains and Maize Condensed Distiller’s Solubles

38. Nutrient composition and protein digestibility of DDGS based on solubles level Solubles level a, % of DDGS mix (DM) Item 0 5.4 14.5 19.1 22.1 DM, % 95.5 92.1 90.8 89.3 89.6 CP, % 32.1 31.9 31.5 30.7 30.9 Fat, % 6.9 8.9 10.4 12.7 13.3 NDF, % 36.8 34.9 31.9 30.3 29.3 CP Digestibility b 97.2 97.4 97.9 97.9 97.9 a Solubles level calculated using % NDF of solubles (2.3%) and 0% solubles DDG b In situ total-tract protein digestibility

39. Nutrient Composition of DDGS 8 Ethanol plants sampled (5MN, 2SD, 1NE) Item NRC Mean Range Crude Prot. % 27 - 33 30.1 26 - 36 EE % 7 – 13 10.5 4 - 19 NDF % 31 – 47 48.8 39 – 62 S.R. Harty, J-M Akayezu, J>G> Linn and J.M. Cassady 1998

40. Which DDGS has the best Quality? Not all DDGS are created equal ABC Nutrition Color Particle size Flowability

41. DDGS Varies in Nutrient Content and Digestibility, Color, and Particle Size Among USA Sources

44. Protein Characteristics of DDGS 8 Ethanol plants sampled (5 MN, 2 SD, 1 NE) Item NRC Mean Range Crude Prot. % 27 – 33 30.1 26 – 36 --------% of CP------- Soluble CP ---- 9.7 1 – 22 ADICP 10 – 23 8.0 1 – 19 RUP 42 – 51 53.4 41 – 68 -------% of RUP------- RUP Dig. 80 82.2 72 – 94 S.R. Harty, J-M Akayezn, J.G. Linn and J.M. Cassady, 1998

45. Total and digestible Lysine composition (%) and the color of 8 DDGS samples (as-fed basis) (JAPR: Research report) Color 1 Digestible Lys SampleL* b* a* (%) 1 62.9 28.4 7.6 0.66 2 61.5 26.6 6.1 0.64 3 57.4 21.3 5.8 0.61 4 57.5 20.5 6.9 0.59 5 51.2 13.9 5.7 0.52 6 49.5 11.2 4.1 0.47 7 48.0 8.82 4.3 0.37 8 47.9 9.3 4.4 0.18 Color [lightness (L*), redness (a*), and yellowness (b*)] measured with Minolta Chroma Meter CR-300

47. DDGS LOW DDGS AVE DDGS HIGH 30 17 9 45 42 39 357357 ADIN NDF Starch %CP %DM %DM DDGS LOW DDGS AVE DDGS HIGH 30 17 9 45 42 39 357357 ADIN NDF Starch %CP %DM %DM

48. DDGS LOW DDGS AVE DDGS HIGH 30 17 9 45 42 39 357357 ADIN NDF Starch %CP %DM %DM DDGS LOW DDGS AVE DDGS HIGH 30 17 9 45 42 39 357357 ADIN NDF Starch %CP %DM %DM DDGS LOW DDGS AVE DDGS HIGH 30 17 9 45 42 39 357357 ADIN NDF Starch %CP %DM %DM DDGS LOW DDGS AVE DDGS HIGH 30 17 9 45 42 39 357357 ADIN NDF Starch %CP %DM %DM Wheat Bran = R1500/ton DDGS/Chop = R1700/ton

49. DDGS LOW DDGS AVE DDGS HIGH 30 17 9 45 42 39 357357 ADIN NDF Starch %CP %DM %DM Wheat Bran = R1500/ton DDGS/Chop = R1700/ton

50. DDGS LOW DDGS AVE DDGS HIGH 30 17 9 45 42 39 357357 ADIN NDF Starch %CP %DM %DM Wheat Bran = R1500/ton DDGS/Chop = R1700/ton

51. DDGS LOW DDGS AVE DDGS HIGH 30 17 9 45 42 39 357357 ADIN NDF Starch %CP %DM %DM Wheat Bran = R1500/ton DDGS/Chop = R1700/ton

52. DDGS LOW DDGS AVE DDGS HIGH 30 17 9 45 42 39 357357 ADIN NDF Starch %CP %DM %DM Wheat Bran = R1500/ton DDGS/Chop = R1700/ton

53. DGS in Feedlots

54. INTEGRATED TECHNOLOGY Self sustaining closed loop system – environmentally friendly Waste Management Ethanol and DGS Production Beef and Manure production

55. DGS use in feedlots Inclusion < 15% (0.9-1.4 kg): protein Inclusion > 15% (1.8+ kg): energy

56. Studies Used - WDGS

57. Linear P < 0.01 Average Daily Gain ADG, lb Quadratic P < 0.01 % WDGS (DM basis) WDGS LevelADG (lb) 03.47 103.70 203.83 30 3.87 403.81 503.66 Predicted Values

58. Feed Conversion F:G WDGS LevelF:G 06.44 106.16 205.95 305.81 405.74 50 5.73 Predicted Values Linear P < 0.01 Quadratic P = 0.09 % WDGS (DM basis)

59. Feeding Value of WDGS Feeding Value (% of maize) WDGS LevelFV % Corn 10145 20142 30137 40131 50 126 Predicted Values % WDGS (DM basis)

60. Studies Used - DDGS ExperimentYearDiet DM % DDGSHd/Tx Benson et al.20050, 15, 25, 3548 Bremer et al.20050, 3060 Buckner et al.20070, 10, 20, 30, 4040 Ham et al.19940, 4032 May et al.20070, 2596

61. Linear P < 0.01 Average Daily Gain ADG, lb Quadratic P < 0.01 % DDGS (DM basis) DDGS LevelADG (lb) 03.43 103.63 203.73 30 3.74 403.65 Predicted Values Cubic P = 0.54

62. Feed Conversion F:G DDGS LevelF:G 06.62 106.41 206.31 306.31 406.42 Predicted Values Linear P = 0.07 Quadratic P = 0.02 % DDGS (DM basis) Cubic P = 0.97

63. Feeding Value of DDGS Feeding Value (% of maize) DDGS LevelFV % Corn 10153 20123 30107 40100 Predicted Values % DDGS (DM basis)

64. Relationship between US Maize and DDGS prices Source: CARD, Iowa State University

65. Feeding value of wet vs. dry distillers grains (Ham et al., 1995) WDGS DDGS Control Low a Medium a High a Daily feed, kg 11.0 bc 10.7 b 11.5 c 11.3 cd 11.8 d Daily gain, kg 1.47 b 1.68 c 1.66 c 1.68 c 1.71 c Feed/gain 7.69 b 6.33 c 6.94 d 6.76 d 6.90 d Improvement (vs Control), % Diet -- 21.5 ………….11.9 (avg.)……….. Distillers vs. Maize -- 53.8 ………….29.8……………… a Level of ADIN, 9.7, 17.5 and 28.8%. b,c,d Means in same row with different superscripts differ (P<0.05)

66. Wet Byproducts for Cattle  Cost of transporting water  Superior Feeding Value Dry Byproducts for Cattle  Storage  Transport over long distance

67. In Summary … Ethanol industry has major influence on overall global agricultural economy USA exports of DDGS are rapidly increasing as end users better understand the use of DDGS in their feeding operations Ethanol production process is not an exact science, there will be variability Variability can (should) be managed and evaluated Quality control measures can be implemented to ensure a reliable supply of quality DDGS Need industry standardized and quick testing of DDGS Match your needs with DDGS quality

68. In Summary … DGS low in starch –Reduces potential of acidosis Highly digestible fibre (40-45% NDF) and yeast cells (3-5%) –Stimulate rumen fibre digestion –Compliment high starch maize diets When fed at limited levels (<40%) –Energy content 120-130% of maize Reasonable source of undegradable protein (UDP) source –UDP quality and bioavailability could be a problem Feedlot cattle find DDGS very palatable

69. Thank You