SD Corn

With harvest long since completed, you might be wondering what happens to all of the corn that was raised in South Dakota. Where does it go and who uses it?

South Dakota ranks 6^th in the nation in corn production, providing food, feed, fuel and fiber to growing populations in the state, nation and all around the world. This year, farmers grew 535.3 million bushels of corn according to USDA/NASS, down significantly due to the drought but still the state’s 7^th largest corn crop on record due to the new farming practices and improvements in seed technology. Primarily, the state’s corn will be used for ethanol and distillers grain production, livestock feeding and exports.

• Ethanol: South Dakota’s 15 ethanol plants will utilize *320 million bushels of corn this year. Those bushels will produce nearly one billion gallons of ethanol and *2.44 million metric tons of distillers grain (aka livestock feed) and 235 pounds of corn oil, which is being extracted at 14 of the state’s ethanol plants and can be used to produce biodiesel.

• Livestock: Farmers also feed corn to livestock around the state. Around *85 million bushels of the 2012/13 corn crop will be fed to the state’s beef, bison, dairy, hogs, poultry and other livestock. Distillers grains are quickly becoming a popular feed source in South Dakota because of the product’s efficiency and will displace the need for *22 million bushels of corn this year. Feeding corn and DDGs to livestock is a great example of economic development and value-added agriculture in South Dakota.

• Exports: Around *157 million bushels of the state’s corn crop and *1.87 million metric tons of DDGs will be exported this year. With the drought affecting so much of the Midwest, its uncertain where the crop is headed but most will be moved out on rail headed west towards the Pacific. With last year’s passing of three key Free Trade Agreements along with a growing global middle class, exports will remain strong into the future.

South Dakotans can be proud of the fact that their state’s farmers were able to not only meet our own needs during the worst drought in the last half century, but also continue to play an important role in providing food, feed, clean fuel and fiber to the world’s growing population of seven billion and counting.

*Statistics according to The ProExporter Network 1/11/13

“Era muy caliente, y muy seco.” For those who don’t speak Español, that translates to “It was very hot, and very dry.”

That description comes from South Dakotan, Kevin Schnaser who recently served as a translator for a group of agriculture students from South Dakota State University who traveled to Argentina on a two week study abroad trip in early January of this year.

Those words are exactly breaking news, but due the role that Argentina plays in to the global markets, they are sort of a big deal. Argentina has been the #2 leader in global corn exports, and #3 in soybeans. So when a major grain exporter struggles, the world  takes notice.

So just how bad is it? Well according to Schnaser who has served as a translator on student trips to Argentina for the past four years, “This has been the hottest summer weather Argentina has experienced in 50 years, it was easily over 100 degrees every day.”

He went on to say, “The corn was pollinating at the time we visited and the silk coming out of small green ears were in no shape to be pollinating.”

The group toured many different components of the countries agriculture and were able to speak with an agronomist at a farm in the Province of La Pama. He told the group that the area had projected corn yields of between 100-150 bushels per acres. But due to the impact of the drought, that number had been cut in half to between 50-75 bushels per acre, even if they were to receive some rain.

That projection comes from a more central part of the country where it is much drier than the coast.  Analysts currently are predicting that at least one-third of Argentina’s corn crop has been lost due to the drought which amounts to around 10 million metric tons or 10% of global exports.

Some areas are much worse. The same agronomist who visited with the group said that in the province of Cordoba, the corn fields were brown and being grazed by cattle.

So what does this mean for exports? In Argentina, the populist government controls the markets and can shut down exports of grain which keeps the price down domestically insulating the country from rising food costs, but not so much for the rest of the world, especially Europe which is a major importer of the countries commodities.

A marketing analyst from Lartirigoyen told the group that a certain fixed amount that will be needed within the country and beyond the government will allow to export, with the shortage in production that is already going to occur in soybeans, you can expect an increase in your crop prices in North America.

To sum up the message from Argentina; even with some rain, there will still be a significant crop loss.

*Photos courtesty of Dr. Julie Walker, Associate Professor, SDSU Dept of Animal Science

As South Dakota corn fields have been cut and only the stalks, stover and cobs remain, you might be wondering just what happens to all of that corn that was harvested? Where exactly will the state’s projected *648 million bushels of corn produced in 2011 end up?

South Dakota has three main markets for its corn: ethanol, exports and livestock.

• Ethanol- Our state is home to 15 ethanol plants who will consume around 366 million bushels (around 56% of the total crop) this year. Those bushels are turned into well over one billion gallons of clean-burning ethanol fuel and around 2.9 million metric tons of distillers grains (DDGs). The ethanol industry employs thousands of hard-working South Dakotans and provides a source of energy security to our country as it displaces our need for foreign oil.

• Exports- South Dakota has a reputation of producing an abundance of high quality corn welcomed by nations around the world. In 2011 South Dakota is expected to export around 192 million bushels of corn (around 30% of the total crop). With the recent passing of the Free Trade Agreements, look for more corn to be exported in future years. Another noteworthy export would be DDGs which have become hot commodity overseas. SD is expected to export around 2.2 million metric tons of DDGs this year alone.

• Livestock- Beef and dairy cattle, bison, hogs, poultry, sheep and other types of livestock are expected to consume around 83 million bushels (around 13%) of South Dakota’s 2011 corn crop. While corn demand for feed may be relatively flat over the past decade, feeding corn is still the best way to add value to livestock. The state’s herds are also expected to consume around 650,000 metric tons of DDG’s this year as ranchers utilize the high-protein, less-expensive ethanol co-product.

South Dakotan’s can be proud to know that their state goes well beyond meeting their own needs, but plays an important role in providing food, feed, clean fuel and fiber to world’s ever-growing population which has recently passed seven billion.

*USDA-NASS projection

It’s rarely mentioned by the ethanol haters and touted by the rest, distillers grains. Just ask any livestock producer using it, the stuff works and it’s cost effective too. Now a new report shows that its feed value and production efficiency are even better than originally thought.

According to the U.S. Department of Agriculture, one ton of distillers grain can replace 1.22 tons of corn and soybean meal. This can be attributed to the feed’s higher energy and protein content.

 USDA also noted that instead of just 1/3 or 33% of the corn being used for ethanol coming back as distillers grains, it’s actually around 40% (weight). Most people don’t realize that the ethanol process only removes the kernels starch content leaving behind the protein, fat, fiber and other nutrients for livestock feed.

 “The value of the animal feed produced by the ethanol industry has long been misunderstood, understated and misrepresented,” said Geoff Cooper, RFA Vice President of Research & Analysis. “Distillers grains continue to be the industry’s best kept secret, despite the fact that we are producing tremendous volumes of this high value feed product today. DDGS and other ethanol feed products significantly reduce the need for corn and soybean meal in animal feed rations. Over the past several years, distillers grains have been one of the most economically competitive sources of energy and protein available on the world feed market. While some critics of the ethanol industry attempt to downplay the role of DDGS, the facts simply can’t be ignored.”

This year the United States will produce 13 billion gallons of renewable ethanol fuel and 39 million metric tons of distillers grains. That amount of distillers grains is equivalent to the 4^th largest corn crop in the world. DDGs will displace more than one billion bushels of corn for feed in the U.S. this year alone and 1/4^th of it will be exported. Through ethanol production, America’s family corn farmers are reducing our nation’s dependence on foreign oil and feeding countries around the world by utilizing co-products like DDGs, efficiently using corn to produce both Food and Fuel.

South Dakota Corn board presidents, Gary Duffy and David Fremark took part in a recent United States Meat Export Federation trip to China where they toured the country while meeting with government officials.

“The goal of our trip was to see what potential demands China has for American corn,” said South Dakota Corn Growers Association President, Gary Duffy, a farmer and rancher from Oldham, South Dakota.  

Several sources indicate that China will need to import additional feed sources with the growing population and current drought, but prices will play a determining factor as to where those grains come from.

“I expect them (China) to be buying more American corn to feed their expanding dairy, hog and poultry operations,” said Duffy. “China has a very large middle class that is growing and looking to enhance their diet by consuming more meat.”

China is much different than the United States in that they have around 400-500 million farmers at subsistence levels on two to three acres, although a growing demand for meat in the larger urban centers is changing the countries agricultural landscape.

South Dakota is known for producing an abundance of quality corn and that corn is in high demand abroad with much of the world not able to meet their own food and feed demands. South Dakota farmers take pride in helping feed the world, and those demands aren’t going away anytime soon with an ever increasing population.

“Export markets are an important part of U.S. corn consumption as American corn farmers continue to grow more corn per acre than anyone else,” said NCGA Trade Policy and Biotechnology Chairman, Chad Blindauer, a farmer from Mitchell, South Dakota, U.S. “We are always working on building new markets, here and abroad, for U.S. corn and support efforts to open overseas markets for conventional corn.”

As South Dakota produced a record corn crop in 2009, exports totaled 30% and will be at a similar percentage again in 2010 helping various countries meet their food and feed needs.

Steve Domm, General Manager at Central Farmers Cooperative said, “We export around 35-40% of our corn, but I expect South Dakota corn exports to stay static with local ethanol production.”

With ethanol production comes dried distiller grains (DDG’s), a high protein, partial replacement to corn that’s popularity has grown rapidly both domestically and in the export market. South Dakota has been a leader in DDG use and production as they exported over two metric tons of DDG’s last year and will do so again this year.

“Increased ethanol production means increased DDG production,” said Blindauer. “While our corn export percentages may stay level, DDG exports will continue to grow and thrive meeting future feed needs abroad.”