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Energy Costs and Corn Processing Opinions of Dr. James I. Sprague, Livestock Nutritionist Natural Gas Costs Explode in 2001 "With high natural gas costs, should we stop flaking and consider other methods of grain processing?" Many feedlot managers asked this question this winter and spring of 2001. Natural gas cost at one Kansas feedyard jumped 4.2 times higher for January 2001 compared to 2000. Therefore the estimated cost of natural gas per ton of feed produced increased from $1.41 per ton in January 2000 to a whopping $5.88 in January 2001. Fortunately the cost began to reduce in February. If the efficiency improvement of flaked corn is 8 percent better than dry corn, it follows that with $4.00 per cwt. ($2.24 per bushel) the improvement of the steam flaking will be forty cents per hundred or $8.00 per ton. Therefore, when natural gas energy cost of steam flaking increases, the higher cost can severely cut in the profits of a feedyard, because the processing cost must be recovered by feed mark-up or yardage charges. Practical Alternatives The decision to flake corn is based on two major economic considerations: (1) cost of grain and (2) cost of the processing, including all costs. Natural gas cost is only one part of steam flaking. Electric energy costs have increased also. Overhead, labor, maintenance, interest on the investment, and depreciation are the other major cost factors. Quality control of the flaking process is the first place to start. Corn is more forgiving than sorghum grain (milo), but proper steaming and flattening to at least 28 pounds per bushel is needed. Another idea is to use a second grain such as dry processed wheat or dry corn as part of the grain mix. The improvement of the rumen environment from the steam flaked corn appears to help a second grain. For the long run, should a high moisture grain be considered as the major grain ingredient in place of flakes? What Did Early Colorado Experience Say? One of the early tests at Colorado was an extension demonstration at Ault supervised by Bob Wardlaw, the agent for Weld County, at Greeley, Colorado and me. We observed similar gains but less feed consumption for the flaked rations compared to the cracked grain that was fed. Subsequent research by Matsushima and his team proved that the flakes were an effective method of improving feed efficiency. R.L. (Bob) Montgomery and Matsushima proved the flatness of the corn flake was also important for flaking corn. The experiment was the seminal project for the importance of quality control of the flaking process. My personal conclusion of that research at Colorado was: 1. Ten percent less corn was required for the cattle. The experiments used the same amount of supplement and roughage, but the grain was adjusted to the cattle appetite. 2. The cattle appeared to reach the desired finish a little earlier. 3. Quality control of the steaming and flaking is critical. Research Confirms the Benefit of Flakes In 1980 the late W.H. (Bill) Hale and Frank Prouty published a review to the research of grain processing (University of Arizona An. SCI. Res. Report. 1980). This review was later used in the update of the NRC Beef cattle publication. They said, "Approximately 50 comparisons were used." Here is a direct quote from the report regarding corn-processing flakes vs. cracked. "Average daily gain was not affected by flaking corn as compared to dry rolled corn; however, feed intake on the flaked corn was reduced by 8.4 percent. As a result, feed requirement was improved by 8.4 percent. If one assumes no associative effect due to the flaking, then the improvement in the grain utilization due to the processing was 11.4 percent." (Note: For a copy of this research report, contact U. of AZ, or Jim Sprague 316-283-8692) Since the review, Tom Eck and Spencer Swingle, again at the University of Arizona, demonstrated the efficiency of flaking corn compared to dry processed corn. Cost Benefits Depends on Corn Costs Steam flaking corn pays more with high priced corn rather than low price corn. The situation in the spring of 2001 was relative modest priced corn and high priced energy. Some time in the future both the price of energy and grain may both be high. The flaking process will have to overcome all costs of the grain preparation in addition to just the steam generation. High Moisture Corn, a Long Range Commitment High moisture processing storage of early harvested corn is a strong alternative to flaked grain. High moisture corn, either stored in bunkers or in oxygen limited structures is considered more efficient than dry processed corn, according to Hale and Prouty's review. Their review indicated "early harvested and reconstituted corn" gave an 8.5 percent efficiency of grain utilization compared to dry processed corn. However, changing from flaked processing to a high moisture corn program is a long-term commitment for a feeding company. A long-range strategy for the processing of corn, with both energy costs and high grain costs, a high moisture program may be a more economical method and be the surviving system for grain storage and grain processing. Questions or comments on this article should be addressed to Jim Sprague, 625 Grandview Ave, Newton, Kansas, 67114 or call (316) 283-8692. |
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