The Role of Animal Agriculture in the Bioeconomy Allen Trenkle Iowa State University

Historical Background of Biofuels Mid-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 corn Early-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 production Late 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 livestock 3. 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 than past 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

Use of Corn ( )

Ethanol Production in Iowa Dry-Grind Plants Current Production New Expand Total Number of plants Ethanol, bil gal/yr Corn used, mil bu/yr ,178 DGS produced, mil ton DM/yr Cattle inventory needed a a Could 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 problem Dry DGS is a commodity feed and can be moved Plants have dryers so wet DGS priced on dry Low 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 Production Implications 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 use of 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 agriculture October 12, 2007 – A broad coalition of organizations representing animal agriculture urge congressional leaders to oppose increasing RFS for grain-based ethanol 2. Livestock industries coordinate with production of biofuels and 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 producers 2. Develop coordinated food and energy systems Produce food(s) and energy 3. Improve net energy balance of the coordinated system 4. 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 Production Iowa Corn Ethanol Fuel DGS FeedlotFood CH 4 Identified markets Fertilizer Branded products Manure Anaerobic Digester Future: Use CO 2 from ethanol & digester Grow algae Synthetic 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

GroupNumber Water Mil gal/yr Cows2, a Replacement heifers 1 yr Replacement heifers 2 yr a Feedlot TOTAL17.33 Beef Herd to Support Feedlots 1000 Head Feedlot Turned 2 x per Year a Corrected 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) 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 to 250 mgy water ○ 26.5 beef units to use DGS from 50 mgy plant mgy ○ Feed wet DGS: Recycle 29 to 36% of water used by ethanol plant Feeding Wet DGS Recycles Water Wet DGS (32% DM)

Integrating Cattle and Ethanol Improves Net Energy Biofuel energy/Petroleum energy Based on EBAMM model University of California-Berkeley Benefits 1.Reduce use of commercial nitrogen fertilizer 2.Greater value of DGS 3.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 Heifers Four Experiments ControlMediumHigh End live wt, lbs Daily gain, lbs Feed/gain Carcass wt, lbs Dressing % REA, sq in Backfat, in Call YG Medium = 20 or 28%, high = 40% wet DGS AOV: ADG P < 0.04, Dress % (P < 0.05) Bonferroni t-test: No significance

Steers Fed Modified Wet Distillers Grains (52% DM) % DGS, dry basis Feed DM, lbs/d Gain, lbs Feed/gain Carcass wt, lbs Marbling score % Choice Carcass value, $ Cattle: 690 lb steers fed 186 days, implanted 2 x. Carcass value based on premiums and discounts. DGS 52% DM.

Net Income Steers Fed Modified Wet DGS Net income from feeding 690 lb steers a corn-based diet or modified DGS. Net income based on carcass value and related to price of corn and DGS (as % of corn price).

Steers and Heifers Fed Modified Wet DGS (52% DM) % Modified DGS on dry basis 0a0a 20 a 40 a 60 b Steers (830 lbs) Feed DM, lbs/d Gain, lbs/d Feed/gain Heifers (725 lbs) Feed DM, lbs/d Gain, lbs/d Feed/gain a Fed 120 days b Fed 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 SteersCarcass wt, lbs Dressing % Marbling score % Choice % CAB Carcass value, $ HeifersCarcass wt, lbs Dressing % Marbling score % Choice % CAB Carcass value, $ Carcass value based on premiums and discounts.

Net Income Heifers Fed Modified Wet DGS Net income from feeding 725 lb heifers a corn-based diet or modified DGS. Net income based on carcass value and related to price of corn and DGS (as % of corn price).

Net Income Steers Fed Modified Wet DGS Net income from feeding 830 lb steers fed a corn-based diet or modified DGS. Net income based on carcass value and related to price of corn and DGS (as % of corn price).

Steers and Heifers Fed Wet DGS (32% DM) 2007 Experiment (Preliminary data at 84 days) % Modified DGS on dry basis Steers (812 lbs) Feed DM, lbs/d Gain, lbs/d Feed/gain Heifers (712 lbs) Feed DM, lbs/d Gain, lbs/d Feed/gain Control 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 extent 3.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