1) DDGS are a coproduct of dry grind ethanol production from corn. As ethanol production has increased in the US, so too has the supply of DDGS. 2) DDGS are used primarily as livestock feed, with beef cattle, dairy cows, swine, and poultry being major consumers. Evolving ethanol production processes are impacting the nutritional composition and fractionation of DDGS. 3) New fractionation and oil extraction technologies are allowing ethanol plants to produce higher value coproducts like fiber, protein fractions, and corn oil from DDGS. These technologies and uses of DDGS are driving new opportunities for the ethanol coproducts industry.

1. DDGS:
OVERVIEW AND TRENDS
Kurt A. Rosentrater, Ph.D.
Distillers Grains Technology Council
Iowa State University, Ames, IA USA

2. OVERVIEW
1. Motivations
2. Processes & coproducts
3. Economics & markets
4. Evolving processes & new opportunities
5. Other issues
2

3. 3
MOTIVATIONS

4. MOTIVATIONS
• Ruminants or monogastrics
4
Animal

5. MOTIVATIONS
• Ruminants or monogastrics
5
Feed Animal
Water
Methane
Feces
Urine
Water vapor
CO2
Other gases
O2

6. DDGS IN THE MARKETS
Livestock
producers
Alcohol
manufacturers
6
• As ethanol industry goes, so goes the
supply of coproducts
• Balance = key to sustainability

7. 7
PROCESSES
&
COPRODUCTS

8. MANUFACTURING
Dry Grind Process
8
40 MG/Y = 150 ML/Y
120 MG/Y = 450 ML/Y

9. ETHANOL COPRODUCTS
Distillers Wet Grains
Condensed Distillers Solubles
Distillers Dried Grains with Solubles
9
+

10. FERMENTATION PRODUCTS
Theoretical Yields
1 kg glucose = 0.51 kg ethanol
+ 0.49 kg carbon dioxide
Practical Yields
90 – 95% of theoretical
+ yeast cell mass
+ secondary products
Anecdotally:
1 kg corn =
1/3 kg ethanol
+ 1/3 kg CO2
+ 1/3 kg DDGS
10

11. DDGS
Unit Avg SD Min Max
Dry matter % as fed 89.0 1.4 86.6 91.9
Crude protein % DM 29.5 1.8 25.2 33.5
Amino acids
Arginine % protein 4.3 0.3 3.4 5.1
Histidine % protein 2.7 0.2 2.2 3.1
Isoleucine % protein 3.8 0.3 3.2 4.3
Leucine % protein 11.6 0.6 10.1 13.3
Lysine % protein 3.0 0.3 2.1 3.7
Methionine % protein 2.0 0.2 1.7 2.7
Phenylalanine % protein 4.8 0.2 4.3 5.4
Threonine % protein 3.7 0.1 3.3 4.0
Tryptophan % protein 0.8 0.1 0.6 0.9
Tyrosine % protein 3.9 0.5 3.1 4.7
Valine % protein 5.1 0.3 4.3 5.6
NDF % DM 34.2 6.8 18.3 47.4
Fat (ether extract) % DM 11.1 2.2 7.1 15.7
Ash % DM 5.4 1.0 3.4 7.5
Ca g/kg DM 1.6 1.6 0.2 5.5
P g/kg DM 7.9 1.0 4.9 9.8
K g/kg DM 10.3 1.1 7.1 12.7
Mg g/kg DM 3.3 0.4 1.9 3.9
Na (ppm) g/kg DM 2.4 1.8 0.6 7.2
Zn (ppm) mg/kg DM 62 16 43 105
Mn (ppm) mg/kg DM 21 8 12 44
Cu (ppm) mg/kg DM 6 2 3 10
Fe (ppm) mg/kg DM 123 41 70 239
COPRODUCT COMPOSITION
Source: http://www.feedipedia.org/

12. Unit Condensed Solubles (CDS) Thin Stillage DWG
Dry matter % as fed 32.0 5.0 35.0
Crude protein % DM 20.4 17.9 44.0
Amino acids % DM
Arginine % protein 3.4
Histidine % protein 2.4
Isoleucine % protein 3.5
Leucine % protein 12.0
Lysine % protein 2.6
Methionine % protein 1.9
Phenylalanine % protein 4.6
Threonine % protein 3.2
Tryptophan % protein 0.5
Tyrosine % protein 4.1
Valine % protein 4.4
NDF % DM 4.2 12.5 28.8
Fat (ether extract) % DM 17.3 9.2 5.1
Ash % DM 9.5 6.3 2.6
Ca % DM 0.11 0.2
P % DM 1.53 4.2
K % DM 2.21 3.9
Mg % DM 0.67 1.1
Na (ppm) g/kg DM 2.0 1.3
Zn (ppm) mg/kg DM 61.0 39.0
Mn (ppm) mg/kg DM 24.0 6.0
Cu (ppm) mg/kg DM 5.2 3.0
Fe (ppm) mg/kg DM 76.0 53.0
COPRODUCT COMPOSITION
Source: http://www.feedipedia.org/

13. 13
ECONOMICS
& MARKETS

14. 0
5
10
15
20
25
30
35
40
45
0
10000
20000
30000
40000
50000
60000 1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Coproducts(t)x106
FuelEthanol(L)x106
Year
Ethanol Production
Coproduct Generation Corn oil extraction
14
U.S. ETHANOL GROWTH
Nov. 1, 2016: 214 plants, 15,608 MG/y
RFS: 15,000 MG/y of corn ethanol by 2015

15. MARKETS
Co-products and Products Dec 2014 Jan 2014 Feb 2015
Dry Mill
Condensed distillers solubles (CDS-syrup) 172,082 162,626 128,057
Corn oil 97,380 105,356 96,347
Distillers dried grains (DDG) 448,551 438,936 405,025
Distillers dried grains with solubles (DDGS) 1,919,823 1,862,550 1,649,534
Modified distillers wet grains (DWG) <65% moisture 1,411,411 1,341,938 1,144,177
Modified distillers wet grains (DWG) 40-64% moisture 503,258 480,134 421,666
Wet Mill
Corn germ meal 75,031 71,492 48,546
Corn gluten feed 329,431 321,768 283,990
Corn gluten meal 94,777 90,617 80,855
Corn oil 44,551 41,961 41,020
Wet corn gluten feed 40-60% moisture 338,077 313,400 274,763
NASS/USDA MONTHLY CO-PRODUCTS PRODUCTION
Co-products and Products May 2015 April 2016 May 2016
Dry Mill tons
Condensed distillers solubles (CDS-syrup) 148,757 130,324 131,318
Corn oil 117,049 111,077 121,699
Distillers dried grains (DDG) 418,448 374,750 411,467
Distillers dried grains with solubles (DDGS) 1,861,795 1,717,024 1,842,182
Modified distillers wet grains (DWG) <65% moisture 1,368,926 1,264,745 1,234,315
Modified distillers wet grains (DWG) 40-64% moisture 414,956 429,972 425,532
Wet Mill
Corn germ meal 69,274 67,530 63,859
Corn gluten feed 348,355 306,464 332,975
Corn gluten meal 97,139 84,916 88,177
Corn oil 53,208 51,455 50,262
Wet corn gluten feed 40-60% moisture 323,436 301,283 306,424

16. • 1 tonne of DDGS can replace 1.22 tonnes of corn/soybean
meal (or more)
• Estimates may not match current feeding levels
– Prices change
• Potential consumption rates are based on the price of DDGS
not being a barrier to use
Current Feedings Rates in the U.S.

17. • Beef Cattle:
– Maximum potential inclusion rate: 20-50%
• 2007 recommendations: 22%
• Dairy Cows:
– Maximum potential inclusion rate: 10-30%
• 2007 recommendations: 8%
• Swine:
– Maximum potential inclusion rate: 10-50%,
• 2007 recommendations: 10%
• Poultry (Layers, Broilers, Turkeys):
– Maximum potential inclusion rate: 10-15%
• 2007 recommendations: N/A
Current Feedings Rates in the U.S.

18. Based on data provided by Cheryl Anderson, DTN 18
DDGS IN THE MARKETS

19. 19
DDGS IN THE MARKETS
Based on data provided by Cheryl Anderson, DTN
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
January-2011
May-2011
September-2011
January-2012
May-2012
September-2012
January-2013
May-2013
September-2013
January-2014
May-2014
August-2014
December-2014
ValueofDDGSRelativetoCornorSoybeanMeal
Price Relative to Corn
Price relative to Soybean Meal

20. DDGS IN THE MARKETS
20Based on data provided by Cheryl Anderson, DTN

21. 21
DWG IN THE MARKETS
Based on data provided by Cheryl Anderson, DTN

22. 22
DDGS IN THE MARKETS
Based on Hoffman and Baker (2010) and U.S. Grains Council (2014)
0
5
10
15
20
25
30
35
1992/93
1993/94
1994/95
1995/96
1996/97
1997/98
1998/99
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
Marketing year
DDGS(tonnes)x10
6
Production
Export

23. 23
DDGS IN THE MARKETS
Based on Hoffman and Baker (2010) and U.S. Grains Council (2014)

24. EVOLVING
PROCESSES &
NEW
OPPORTUNITIES
24

25. Biofuel
Coproducts
Proteins
Oils
Fibers
Component
Fractionation
25
FRACTIONATION

26. FRACTIONATION
26

27. 0
5
10
15
20
25
30
35
40
Protein (%) Fat (%) NDF (%) Starch (%) Ash (%)
2000
2006
2012
EVOLVING COPRODUCTS
Source: Dairy One, 2015

28. 0
0.2
0.4
0.6
0.8
1
1.2
S (%) P (%) Ca (%) Mg (%) K (%)
2000
2006
2012
EVOLVING COPRODUCTS
Source: Dairy One, 2015

29. EVOLVING
PROCESSES
• Oil extraction
– New enzymes
– New chemicals
– New treatments

30. EVOLVING PROCESSES
• Oil extraction from CDS or stillage
– 10-12% down to 5-8% fat (or less)
– BUT: every 1% fat reduction = $3-$6 /ton livestock diet
increase (impact on the livestock producer)
– Jan. 2012: 47% of ethanol plants extracting oil
– Aug. 2014: ~85%
– Nov. 2016: ~94%
30
Now:
1 kg corn =
1/3 kg ethanol
+ 1/3 kg CO2
+ 1/3 kg DDGS
+ 0.02 kg oil

31. EVOLVING
PROCESSES
• Fiber & protein
separation
– From the DDGS or DDG

32. DDGS FRACTIONATION
a) Original DDGS; b) big DDGS; c) pan DDGS
Big Original Pan
Property Mean St Dev Mean St Dev Mean St Dev
Protein 31.85 a 1.06 33.00 a 0.99 37.25 b 0.21
Lipid 8.65 a 0.07 7.95 b 0.07 7.00 c 0.01
Ash 4.70 a 0.01 4.70 a 0.01 5.00 b 0.01
Carbohydrate 54.80 a 1.13 54.35 a 0.92 50.75 b 0.21
ADF 11.60 a 0.71 12.40 b 0.57 11.45 a 0.07
NDF 34.55 a 0.49 37.80 b 0.14 29.15 c 0.21
32

33. DDGS FRACTIONATION
DDGS fiber
• Protein: 42% db
• Lipid: 1.7% db
• NDF: 52% db
• Ash: 4.0% db
33

34. EVOLVING
PROCESSES
• Fiber & protein
separation
– Upstream may be better

35. • Using coproducts (wet or dry) to grow
other organisms
– Algae
– Single-cell proteins
– Fermentation of DDGS & soybean meal
– Fungal cells for protein
EVOLVING COPRODUCTS

36. 0.0
0.2
0.4
0.6
0.8
1.0
1.2
0 20 40 60 80 100 120
%Fish Meal Replaced
RelativeFeedCost($/tonne)
FM: 1000 $/tonne
FM: 2000 $/tonne
DDGS: 100 $/tonne
Tilapia Perch
AQUACULTURE
• Tremendous untapped opportunity – 200 MMT/year
• DDGS ~ 1/10 to 1/20 the price of fish meal
Trout
36
Nile Tilapia
Rainbow Trout
Yellow Perch

37. OTHER ISSUES
37

38. YEAST CELLS
• Bauerfeind et al. (1944)
– 4 x 109 cells/g dried syrup (CDS)
– ~ 20% of syrup
• Ingeldew (1999)
– DDGS by mass: 3.9%
– 5.3% of the DDGS protein
• Belyea et al. (2004)
– 50% of the DDGS protein
• Han and Liu (2010)
– Up to 20% of the DDGS protein
• Giving away protein in the DDGS
Saccharomyces cerevisiae
How much protein addition?
Probiotic/prebiotic effects?

39. YEAST CELLS
1.0E+00
1.0E+01
1.0E+02
1.0E+03
1.0E+04
1.0E+05
1.0E+06
0 2 4 9
Days
CFU/dryg
1.0E+03
1.0E+04
1.0E+05
1.0E+06
1.0E+07
1.0E+08
1.0E+09
0 2 4 9
Days
CFU/dryg
1.0E+01
1.0E+02
1.0E+03
1.0E+04
1.0E+05
1.0E+06
1.0E+07
1.0E+08
1.0E+09
0 2 4 9
Days
CFU/dryg
A
B
C
A. Lactic-acid bacteria
B. Aerobic heterotrophs
C. Yeasts and molds
How many residual microbes?

40. U.S. DDGS Exports to China Halted
July 31, 2014
On Wednesday, July 23, the Chinese import inspection agency, the General Administration of
Quality Supervision, Inspection and Quarantine (AQSIQ), issued a notice requiring all
shipments of U.S. distillers dried grains with solubles (DDGS) destined for China be
accompanied by a test report with an official stamp certifying the shipment is free from the
Syngenta Agrisure Viptera (MIR 162) biotech-enhanced trait. The notice took effect
immediately and brings serious concern to the industry because not only does such
documentation with an official stamp not exist, either does confidence in the testing results of
MIR 162 in DDGS.
In 2013, exports of U.S. DDGS to China alone were estimated at $1.4 billion.
While MIR 162 has been approved in the U.S. since 2010 and has been approved for import
into the European Union (and most other importing countries), regulatory approval in China is
still pending. In the unofficial translation of the notice, AQSIQ references more than 963 lots
of U.S. DDGS imports having tested positive for MIR 162 since December 2013. Evidence of
U.S. DDGS imports being rejected by China started last December after China began testing
for MIR 162.
Concerns about this new requirement also exist because it may affect the implementation of
AQSIQ's Decree 118 for plant-based protein feed products, which includes DDGS. Decree
118 requires U.S. exporters of plant-based feed products to meet the following criteria to pass
customs inspection into China:
 Exported product must originate from a registered U.S. facility;
 Registered facilities may be subject to audits by AQSIQ officials; and
 Exported product must be accompanied by a shipment-by-shipment certificate.
Facility audits were to begin in the very near future and the American Feed Industry
Association has obtained U.S. government funding through the U.S. Department of
Agriculture's Foreign Agricultural Service's (FAS) Emerging Markets Program to assist with
the auditing requirements set forth from AQSIQ. However, with the Chinese market currently
shut down for U.S. DDGS, the fate of the pending audit requirement, and therefore the
completion of the implementation of Decree 118 for plant-based feed products (including
DDGS), is unknown.
Without implementation of Decree 118 for plant-based feed products, exports of U.S. DDGS
to China will not be able to continue even if MIR 162 were to get approved in China or if
China were to lift the new MIR 162 test report requirement for all shipments. AFIA continues
to work with FAS and other industry groups to address these market access constraints for
U.S. DDGS.
CHINA

41. FDA

42. INCLUSION RATES
$
42

43. FINAL THOUGHTS
• DDGS is critical to
– Ethanol plant profitability
– Livestock producers
– Key to business sustainability
• Need to produce a feed ingredient that
livestock producers desire
– Producing quality DDGS (with low variability)
is what livestock need

44. FINAL THOUGHTS

45. THANK YOU
45
Questions?
Comments?
Kurt Rosentrater
Distillers Grains Technology Council
Iowa State University
(515) 294-4019
karosent@iastate.edu