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Once the grain leaves the farm … then what?

By Staff | Jun 20, 2015

THREE BNSF ENGINES stand ready to hook up to and transport grain cars from Yetter.

OCHEYEDAN – Planning, planting, maintaining and harvesting a crop is the year-round job of grain producers. But what happens to that grain once it gets to the local elevator?

Mike Rosenberg, grain originator and director of business development for Cooperative Elevator Association, in Ocheyedan, said most Northwest Iowa corn goes directly to end-users, such as ethanol plants or a feed entity that needs bushels to make livestock feed.

He said CEA maintains a percentage of purchased corn to use in its feed division.

“In Northwest Iowa, more than 50 percent of corn raised goes to ethanol products,” said Rosenberg. “Most of the rest of it goes for feed needs.

“I would say less than 15 percent goes out on rail today.”

Rosenberg said feed usage is higher in western counties such as Sioux County, which, he said, is in the top running for having the highest livestock population per capita in the nation.

Rosenberg said semi trucks are the most common mode of transportation for corn going to the ethanol industry and said Iowa has more than 40 ethanol production plants in operation.

The build-up of the ethanol industry ended three years ago when it was capable of manufacturing enough ethanol to have 10 percent included into the gasoline pool of the nation.

The ethanol industry has plateaued in production for now, he said.

Rosenberg said ethanol produced locally is consumed in the Midwestern states, with a small percentage hitting the international export market.

“A small percentage of Iowa’s ethanol production is consumed locally, that normally would go to the large cities in big black tanker cars – Chicago, New York, Los Angeles, Tampa Bay or Houston,” said Rosenberg. “It’s then distributed according to population consumption, and the balance is available for exports.”

He said every bushel of corn in Northwest Iowa produces 2.9 gallons of ethanol, 16 pounds of dried distillers grain and one pound of corn oil.

He said 100 percent of distillers grain funnels back to the livestock industry, and a small percentage is exported.

Rosenberg said Northwest Iowa most likely consumes the most distillers grain in the ethanol industry on a local basis.

“That’s because the livestock industry is so concentrated in Northwest Iowa and Southwest Minnesota,” Rosenberg said.

He said corn oil flows into the biofuels industry.

Rosenberg said none of the No. 2 yellow corn produced in Northwest Iowa goes into the food industry.

He said white corn goes to make soft tortilla shells, but No. 2 corn goes primarily to livestock production for meat and ethanol for energy.

“If it goes into the food industry, it’s on a contracted basis with very few growers, and it’s a specific hybrid that only goes into the food industry,” Rosenberg said.

Rosenberg said more than 80 percent of soybeans in Northwest Iowa go to soybean processing plants to produce soybean meal and oil.

The meal goes back into the livestock industry – primarily swine and poultry.

He said the majority of soybean oil goes into the biodiesel industry, and some into the food industry.

When soybeans are shipped by rail, they go to processors beyond Northwest Iowa, with a small percentage of soybeans hitting the international export market.

Rosenberg said with the avian bird flu spreading, there will be more rail shipments in the short term future than has been seen in more than 10 years.

Avian flu, Rosenberg said, has disrupted the corn market with extra corn that won’t be ground for poultry feed, which in turn may provide a cheaper feedstock for ethanol production.

The avian flu has not been friendly to local and regional corn and soybean basis, because of the oversupply.

On a larger scale, Rosenberg said the percentage of No. 2 corn, ethanol, dried distiller grains, No. 1 soybeans, soybean meal and soybean oil that don’t get used locally go out on direct rail to ports on the Mississippi River, where they are loaded onto barges and then onto ocean vessels, which take it to international markets.

He said the Eastern one-third of Iowa has a larger percentage of corn and soybean products that go out to the Mississippi River ports, get loaded on barges, where they are then sent to the New Orleans port, then off-loaded and loaded onto ships.

Rosenberg said the largest importer of U.S. corn is Mexico, and the largest importer of U.S. soybean and soybean products is China.

“China only ships in what it can’t grow,” Rosenberg said. “They have a tariff that will only allow a certain percentage of No. 1 soybeans into their country. They have their own soybean production and soybean processing plants.”

Rosenberg said in Northwest Iowa and Southwest Minnesota there is a small percentage of small grains produced, such as oats, straw and alfalfa.

He said 100 percent of the oats produced goes into the feed industry, while straw goes back into livestock industry for bedding, and alfalfa’s highest percentage goes into livestock as hay, with a small percentage getting dehydrated into alfalfa pellets, which also goes into livestock.

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