With expansion of the U.S. ethanol industry and higher prices for corn, a reduced share of the corn crop is used directly for domestic livestock feeding. However, distillers grains, a coproduct of dry-mill ethanol production, can be used in livestock rations.

Ruminant animals, such as beef and dairy cattle, can use distillers grains more readily. Meanwhile, distillers grains are less suitable in rations for monogastric animals, such as hogs and poultry. Thus, the growth of ethanol production and increased supply of distillers grains result in different adjustments across U.S. livestock industries.

Distillers grains produced in a dry-mill ethanol plant are relatively wet, with as much as 65-70 percent moisture content. This coproduct can be used in livestock feed wet or can be dried and used in a form with lower moisture content. Using wet distillers grains avoids drying costs, but increases handling costs. Also, wet distillers grains must be used relatively quickly to avoid spoilage, limiting how far they can be transported. Dried distillers grains incur costs of drying, but can be shipped over greater distances, including for export. For each 56-pound bushel of corn used in the production of ethanol, about 17.5 pounds of dried distillers grains (or wet-product equivalent) are produced.

Whether used in a wet or dried form, distillers grains used in livestock feed replace some direct corn use, as well as soybean meal in some animal rations. Animal nutrition studies suggest optimal inclusion rates of 30-40 percent for beef cattle rations, although higher rates can be used (Vander Pol et al.). Recommended maximum inclusion rates are 20-25 percent for dairy, 20 percent for growing and finishing hogs, and 15 percent for the grower and finisher stages of poultry feeding (Anderson et al., Shurson et al., and Lumpkins, Batal, and Dale). These studies also indicate that distillers grains (on a dry matter basis) can replace corn in beef cattle rations pound for pound; dairy rations, 1 pound distillers grains for 0.45 pound corn; hog rations, 1 pound distillers grains for 0.85 pound corn; and poultry rations, 1 pound distillers grains for 0.55 pound corn. For each animal type, other feed components are adjusted to rebalance the ration. Protein adjustments affect soybean meal feeding for hogs, poultry, and dairy cattle. Most distillers grains used for cattle feeding displace urea rather than soybean meal as the protein source.

Based on these results and other assumptions, distillers grains from each bushel of corn used to produce ethanol substitutes for about a fifth of a bushel of direct corn feeding in livestock rations. Since beef cattle are large users of distillers grains, only a small reduction is expected in soybean meal use due to the substitution of distillers grains in rations.

Variability of distillers grains makes their use in animal rations more challenging. Consistency in the nutrient makeup of feed is important to ensure the overall balance in rations. Both supply and demand adjustments can address this problem.

On the supply side, this variability has resulted in part from ethanol producers focusing more on the production of ethanol than distillers grains. Since ethanol production has been so profitable, distillers grains have been considered an economic “byproduct” by ethanol producers. Once ethanol margins narrow, however, ethanol producers will have a greater incentive to pay more attention to the value of distillers grains and thus treat it as an economic “coproduct.” These economic incentives suggest that adjustments in the ethanol production process will improve the consistency of distillers grains for use in the livestock sector.

Adjustments can also occur on the demand side. The increased quantity of distillers grains now available for feed use is a new market development. As the market develops further and variability of distillers grains is reduced, the livestock sector will become more familiar with the product and learn how to better manage it in ration formulation.