Producing Premium DDGS Can it be Achieved in a Commodity Driven Market? Tara Vigil Vice President Business Development
Ethanol Plant
Profit Considerations Feedstock Dominates Costs Ethanol Dominates Revenue Feedstock Utilities Chemicals Ethanol Coproducts Other Expense Fixed Costs However. Source: USDA Market News, State EthanolPlant Reports as compiled by Agricultural Marketing Resource Center
Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 Coproducts Make the Margin $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 DDGS Revenue Ethanol Revenue Total Variable and Fixed Cost Total Ethanol + DDGS Revenue $1.00 $0.50 $- Source: Summarized from Ag Decision Maker, D1-10 Ethanol Profitability 4/16/2015 Don Hofstrand
Feeders Biggest Beef with DDGS
Moisture Fiber Granulation Color Flowability Fat Protein Residual Starch Residual Sugar Sulfur
Room for Improvement Average Std. Deviation % Dry Matter 88.13 6.12 % Crude Protein 31.17 4.28 % Crude Fiber 7.45 1.52 % Starch 5.34 4.11 % Crude Fat 12.57 3.16 % Ash 5.87 1.14 % Sulfur 0.64 0.18 Excepted from Dairy One Lab DISTILLERS GRAINS Accumulated crop years: 05/01/2000 through 04/30/2011
Composition (%) 50 DDG(S) Composition Variability by Year 45 40 35 % Crude Protein 30 25 20 Year Summarized from Dairy One Lab DISTILLERS GRAINS Accumulated crop years: 05/01/2000 through 04/30/2014
Composition (%) 1.5 DDG(S) Composition Variability by Year 1 0.5 % Sulfur 0 Year Summarized from Dairy One Lab DISTILLERS GRAINS Accumulated crop years: 05/01/2000 through 04/30/2014
Composition (%) 15 DDG(S) Composition Variability by Year 14 13 12 11 10 9 8 7 6 5 % Starch 4 3 2 1 0 Year Summarized from Dairy One Lab DISTILLERS GRAINS Accumulated crop years: 05/01/2000 through 04/30/2014
Composition (%) 20 DDG(S) Composition Variability by Year 15 10 % Crude Fat 5 Year Summarized from Dairy One Lab DISTILLERS GRAINS Accumulated crop years: 05/01/2000 through 04/30/2014
Purpose of Dryhouse Remove water that was added into the process Produce high quality animal feed
PROCESS WATER RECYCLE BACKSET RECYCLE GRAIN UNLOADING & STORAGE GRAIN MEAL MASH MILLING MASHING/COOKING LIQUEFACTION MASH MFGE MFGE STORAGE DENATURING & LOADOUT DEHYDRATION DISTILLATION BEER SACCHARIFICATION & FERMENTATION CO 2 CO 2 RECOVERY WHOLE STILLAGE THIN STILLAGE DDGS DDGS STORAGE/ LOADING DRYING WDGS WDG CENTRIFUGATION EVAPORATION EVAPORATOR CONDENSATE NAT. GAS COOLING WATER AIR SYRUP FRESH WATER STEAM UTILITIES UTILITIES ELECTRIC
Consistent High Quality is Achievable Average Std. Deviation % Dry Matter 91.4 0.52 % Crude Protein 32.2 1.21 % Crude Fiber 7.9 0.69 % Starch 2.41 0.32 % Crude Fat 7.7 0.39 % Ash 5.0 0.31 % Sulfur 0.28 0.05
You Get Out What You Put In INPUTS Grain Fiber Proteins Fat Starch Contaminants Water Enzymes Nutrient Addition Chemical Additions for: Sanitation ph adjustment Bacterial Control Emissions Control Fouling Control Operation s Input
Whatever You Put in is Concentrated 3-Fold in the DDGS 1/3 1/3 1/3
What Goes into the DDGS Depends on Plant Design Milling Piping Design for Sanitation Equipment Design for Sanitation Instrument Automation Adequate Cooling Water Systems Dryer Design and Sizing Criteria DDGS Handling and Storage
Consistency is Key Milling
Consistency is Key Piping and Equipment Design for Sanitation Minimizes Chemical Inputs Contributes to Reduction or Elimination of Sulfur Addition Minimizes Caustic Consumption Minimizes Sanitation Chemical Usage Contributes to Elimination of Antibiotic Usage
Piping and Equipment Design for Sanitation No Dead Legs
Piping and Equipment Design for Sanitation Welding Keep it Smooth
Piping and Equipment Design for Sanitation Bio-Focused Design for Piping and Equipment
Piping and Equipment Design for Sanitation Bio-Focused Design for Equipment
Piping and Equipment Design for Sanitation Bio-Focused Design for Equipment
Consistency is Key Automated Processes = Consistent Products Fermenter Fill Yeast Slurry Tank Transfer Mash Cooler Train CIP Yeast Slurry Tank CIP Yeast Slurry Tank Fill Fermenter Transfer Fermenter CIP
Adequate Cooling Systems Temperature Maintenance in Fermentation No Stuck Fermenters Minimize Residual Sugar Decrease Infection Potential
Dryhouse Design and Sizing Criteria Solids / Liquid Separation Enough Units for Proper Separation Spare Capacity May be Necessary for Consistency
Dryhouse Design and Sizing Criteria Dryer Size Matters Affects Temperature Necessary to Dry Influences Protein Degradation Influences Volatile Emissions Influences Product Color DDGS Cooling Must be Properly Sized Avoid Bridging Avoid Spontaneous Combustion
DDGS Handling Improper Cooling Leads to Product Bridging
DDGS Handling and Storage
Design Operations Consistent High-Quality Products
What You Put in Also Depends on Plant Operations Backset Sanitation Fermentation Management Chemical Additions
Backset Considerations Backset Decreases Fresh Water Input to Plant Amount of Backset Can Affect Viscosity Backset Affects Necessity for Chemicals for ph Control Amount of Backset Increases Potential for Recycling Contamination and Infection Increasing Backset, Increases Non-Fermentable Solids Recycled and Affects Evaporator Performance
Make Taking Shortcuts in Sanitation Maintain Schedules Monitor Sanitation Chemical Concentrations and Inventories Importance of Shift Uniformity and SOP Maintenance Unacceptable
Laboratory The Lab is the Eyes of the Plant. Without Consistent Lab Sampling and Recording, You are Operating Blind.
Consistent Fermentation Monitoring Establish Baseline Repeatable Results Shift Uniformity
Process Control with Chemicals Affects Coproduct Quality Sodium Bisulfite or Ammonium Bisulfite Sulfuric Acid (ph control or cleaning) Sulfamic Acid (cleaning) Caustic (cleaning) Water Quality (sulfer, minerals)
Inadequate Starch Conversion Poor Yeast Management Poor Fermentation Management Non-Sanitary Operations Inadequate Product Recovery Yield Killers
How Much Does Deceased Yield Really Cost?
Tangible Costs of Decreased Yield 1. Using more grain per liter of ethanol produced 2. Increased Energy Consumption
Realtive Production Yield, Production & Energy Relationship 130 120 110 100 90 DDGS Ethanol 80 100.00 98.00 96.00 94.00 Relative Ethanol Yield 92.00 70 90.00 Decreased Yield = Decreased Ethanol = Increased DDGS = Increased Drying Energy
Process Efficiency 97% 96% 95% 94% 93% 92% Ethanol Yield (L/MT corn) 405.9 401.7 397.6 393.5 389.5 385.4 Feedstock-Corn (MT/day) 1,408 1,422 1,437 1,452 1,467 1,483 Additional DDGS Produced (MT/day) 12.4 21.5 30.7 39.8 49.1 59.0 Additional Feedstock Cost (US$/day) $(1,940) $(3,931) $(5,955) $(8,022) $(10,092) $(12,246) Revenue from Additional DDGS (US$/day) $1,710 $2,961 $4,233 $5,489 $6,759 $8,126 Energy Cost for Extra Drying (US$/day) $(391) $(678) $(969) $(1,256) $(1,547) $(1,859) Total Yearly Loss from Yield (US$/year) $(217,298) $(576,343) $(941,592) $(1,325,932) $(1,707,628) $(2,092,871) Base Yield of 410 L/MT and 98% Process Efficiency for Comparison 200,000,000 Liter per Year Ethanol Plant
Is DDGS Undervalued
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