DISTILLERS DRIED GRAINS AND THEIR IMPACT ON CORN, SOYMEAL, AND LIVESTOCK MARKETS

In 2004 the Ethanol industry produced 3.41 billion gallons, more than twice as much as in 2000.There are 88 ethanol plants in production or under construction. Approximately 75% of this production and the majority of the industry’s growth over the last 5 years come from dry grind corn facilities. The bulk of the remaining production comes from the corn wet milling industry. Because a dry grind plant is cheaper to build and generally more efficient to operate with respect to ethanol production it seems logical that future growth will come in the form of dry grind corn plants. And come it will, currently 14 new dry grind facilities are in various stages of development in Iowa alone. If all 14 plants are built in the next 18 months like is being planed, Iowa, already the top ethanol producing state at 1262.5 billion gallons, will increase capacity by about 70%. Fortunately it appears we lack the ability to build that much capacity in 18 months.