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Distillers By-Products for Swine Diets
Distillers grains are a by-product of the alcohol manufacturing industry. The recent construction of an ethanol plant in Macon, Missouri, has made distiller grains a more economical feed alternative for livestock.
During the alcohol production process, live yeast culture, enzymes and other additives are mixed with milled corn or other high quality grains. This mixture, along with water, is sealed in an airtight vessel and allowed to ferment. After the fermentation process is complete, the solids are screened from the liquid. The liquid fraction is distilled to produce alcohol. The solid fraction is pressed to remove the excess moisture and is then dried and ground to produce distillers dried grains (DDG). After the alcohol has been removed from the liquid fraction, the remaining is evaporated to concentrate the soluble material into condensed distillers solubles (20 to 40 % dry matter) or dried and ground to create dried distillers' solubles (DDS). Dried distillers solubles (DDS) is usually mixed with the DDG to form distillers dried grains with solubles (DDGS).
Distillers grains are quite low in lysine content (0.6-0.9%). Swine diets containing distillers dried grain with solubles (DDGS) need to be formulated on a digestible lysine and energy basis. Formulating the diet on a crude protein basis will result in a lysine deficiency along with a potential deficiency of other amino acids like tryptophan, methionine or threonine. These deficiencies can reduce growth performance.
The breeding herd diet is probably the best place to use DDGS with a maximum inclusion rate of 40% in gestation diets. The use of either distillers dried solubles (DDS) or distillers dried grains (DDG) in swine diets is not recommended. The quality of the protein and ratio of amino acids does not support growth performance.
(Author: Marcia S. Carlson, State Swine Nutrition Specialist, )
EPA Water Quality Regulatory Efforts Affecting Agriculture
The Environmental Protection Agency (EPA) is in the process of updating water quality regulations that address nonpoint water quality concerns in lakes and streams. This effort includes initiatives to:
Confined animal feeding operations are a primary target of the new regulatory effort this section is known as the USDA/EPA Unified AFO (animal feeding operation) Strategy. Crop farmers can be affected by the new regulatory efforts if their operation is within a watershed listed as impaired by nitrogen and/or phosphorus.
The following should be helpful in sorting through these water quality initiatives:
National Water Quality
Permitting and Effluent
This process has the potential to dramatically affect Missouri CAFO regulations. The major impact would be that all livestock operations, regardless of size or livestock species, could be required to have comprehensive nutrient management plans (CNMP). Livestock raised on pasture with greater that 50 % vegetative cover and most livestock pens used for temporarily holding livestock for auction or slaughter would be exempt from maintaining a CNMP.
New Water Quality
Standards for Nitrogen and Phosphorous
Total Maximum Daily Load
Draft Action Plan for
Reducing, Mitigating, and Controlling Hypoxia in the Northern Gulf of Mexico
It should be noted that this is a summary of what is currently being proposed by the EPA and state environmental agencies. While sections of the efforts highlighted above may not become federal or state regulation, agriculture producers of both crops and livestock should take notice that environmental stewardship and protection will become a larger part of the future farming operation.
(Author: Darin Starr, Ag. Engineering Specialist)
Given this years low cash grain prices, the availability of LDP, and the shortage/cost of storage, many farmer/producers may be considering marketing strategies that involve selling cash grain and re-owning "paper grain". The most common types of "paper grain" are futures and options. It is important for farmer/producers to understand the tax consequences for this type of marketing strategy.
First consider the basic differences between speculation and hedging. Hedging transactions can take place at any time the farmer/producer has the commodity under production, has it on hand for sale, or reasonably expects to have it on hand.
Entering into market transactions (long or short/buying first or selling first) with the motive of making money on the rise or fall of the market price is speculating. Selling cash grain and re-owning "paper grain" is often considered by producers and market advisors to be a risk management strategy. However, since the producer re-owns the "paper grain" in anticipation of capturing higher prices, the purchase transaction is considered by IRS to be speculative.
On the other hand, if anyone enters into the futures or options market taking an opposite position they have outside the market the gain or loss in the futures or options market offsets the gain or loss in the physical commodity held outside the market. Thus, this type of futures or options strategy is entered into for the purpose of price insurance (hedging), not price speculation. For example, a producer growing or storing grain could sell futures to hedge the expected price, lift the hedge as price falls and later sell futures again as prices fluctuate higher re-establishing the hedge. As long as the transactions are offset by a cash market position, the transactions are considered hedges.
The tax consequences between a hedge and speculation vary significantly. Futures and option transactions that are not hedging transactions generally result in a capital gain or loss. These capital gains and losses are generally reported on Schedule D and the maximum net capital loss deduction per year is $3000.
The gain or loss on farm commodity hedging is generally an ordinary gain or loss and reported on Schedule F. There is no annual maximum loss deduction relative to hedging transactions reported on Schedule F.
Tim Schnakenberg has joined the Central Missouri Agriculture Staff as Agronomy Specialist in Morgan County. Tim moved to Central Missouri from Southeast Missouri where he was an Agronomy Specialist for nine years. Todd Lorenz has joined the Central Missouri Agriculture Staff as Horticulture/Agronomy Specialist in Cooper County. Todd has been working as a Research Specialist at Sanborn Field for the last nine years.
Ag Connection - October 2000