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Producing Premium DDGS

Tara VigilVice President Business Development

Can it be Achieved in a

Commodity Driven Market?

Ethanol Plant

Profit Considerations

Feedstock

Utilities

Chemicals

Other Expense

Fixed Costs

Feedstock Dominates Costs Ethanol Dominates Revenue

However….

Ethanol

Coproducts

Source: USDA Market News, State EthanolPlant Reports as compiled by Agricultural Marketing Resource Center

Coproducts Make the Margin

Source: Summarized from Ag Decision Maker, D1-10 Ethanol Profitability 4/16/2015 – Don Hofstrand

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DDGS Revenue

Ethanol Revenue

Total Variable and Fixed Cost

Total Ethanol + DDGS Revenue

Feeders’ Biggest Beef with DDGS

• Moisture• Fiber• Granulation• Color• Flowability• Fat• Protein• Residual Starch• Residual Sugar• Sulfur

Room for Improvement

AverageStd.

Deviation

% Dry Matter 88.13 6.12

% Crude Protein 31.17 4.28

% Crude Fiber 7.45 1.52

% Starch 5.34 4.11

% Crude Fat 12.57 3.16

% Ash 5.87 1.14

% Sulfur 0.64 0.18

Excepted from Dairy One LabDISTILLERS GRAINS Accumulated crop years: 05/01/2000 through 04/30/2011

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%)

Year

DDG(S) Composition Variability by Year

% CrudeProtein

Summarized from Dairy One LabDISTILLERS GRAINS Accumulated crop years: 05/01/2000 through 04/30/2014

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DDG(S) Composition Variability by Year

% Sulfur

Summarized from Dairy One LabDISTILLERS GRAINS Accumulated crop years: 05/01/2000 through 04/30/2014

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DDG(S) Composition Variability by Year

% Starch

Summarized from Dairy One LabDISTILLERS GRAINS Accumulated crop years: 05/01/2000 through 04/30/2014

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DDG(S) Composition Variability by Year

% CrudeFat

Summarized from Dairy One LabDISTILLERS GRAINS Accumulated crop years: 05/01/2000 through 04/30/2014

Purpose of Dryhouse

• Remove water that was added into the

process

• Produce high quality animal feed

GRAINUNLOADING &

STORAGE

SACCHARIFICATION& FERMENTATION

THIN STILLAGE

MFGE STORAGE DENATURING &

LOADOUT

DEHYDRATION

MILLING MASHING/COOKING LIQUEFACTION

DISTILLATION

MFGE BEER

WHOLE STILLAGE

EVAPORATIONDDGS

STORAGE/LOADING

DDGS WDG

SYRUP

BACKSET RECYCLE

PROCESS WATER RECYCLE

UTILITIES

NAT. GAS

STEAM ELECTRIC

AIR

COOLINGWATER

UTILITIES

DRYING

MASH

MASH

CO2

EVAPORATOR

CONDENSATE

MEALGRAIN

CENTRIFUGATION

CO2

RECOVERY

FRESH WATER

WDGS

Consistent High Quality is Achievable

AverageStd.

Deviation

% Dry Matter 91.4 0.52

% Crude Protein 32.2 1.21

% Crude Fiber 7.9 0.69

% Starch 2.41 0.32

% Crude Fat 7.7 0.39

% Ash 5.0 0.31

% Sulfur 0.28 0.05

You Get Out What You Put InINPUTS

– Grain• Fiber• Proteins• Fat• Starch• Contaminants

– Water– Enzymes– Nutrient Addition– Chemical Additions for:

• Sanitation• pH adjustment• Bacterial Control• Emissions Control• Fouling Control

– Operation’s Input

Whatever You Put in is Concentrated 3-Fold in the DDGS

1/3

1/3

1/3

What Goes into the DDGS Depends on Plant Design

Milling

Piping Design for Sanitation

Equipment Design for Sanitation

Instrument Automation

Adequate Cooling Water Systems

Dryer Design and Sizing Criteria

DDGS Handling and Storage

Consistency is Key

Milling

Consistency is Key

Piping and Equipment Design for Sanitation– Minimizes Chemical Inputs

• Contributes to Reduction or Elimination of Sulfur Addition

• Minimizes Caustic Consumption

• Minimizes Sanitation Chemical Usage

– Contributes to Elimination of Antibiotic Usage

No Dead Legs

Piping and Equipment Design for Sanitation

Welding – Keep it Smooth

Piping and Equipment Design for Sanitation

Piping and Equipment Design for Sanitation

Bio-Focused Design for Piping and Equipment

Bio-Focused Design for Equipment

Piping and Equipment Design for Sanitation

Piping and Equipment Design for Sanitation

Bio-Focused Design for Equipment

Consistency is Key

Automated Processes = Consistent Products

• Fermenter Fill

• Yeast Slurry Tank Transfer

• Mash Cooler Train CIP

• Yeast Slurry Tank CIP

• Yeast Slurry Tank Fill

• Fermenter Transfer

• Fermenter CIP

Adequate Cooling Systems

Temperature Maintenance in Fermentation

• No Stuck Fermenters

• Minimize Residual Sugar

• Decrease Infection Potential

Dryhouse Design and Sizing Criteria• Solids / Liquid Separation

– Enough Units for Proper Separation

– Spare Capacity May be Necessary for Consistency

Dryhouse Design and Sizing Criteria

Dryer Size Matters– Affects Temperature Necessary to Dry

– Influences Protein Degradation

– Influences Volatile Emissions

– Influences Product Color

– DDGS Cooling Must be Properly Sized

– Avoid Bridging

– Avoid Spontaneous Combustion

DDGS Handling

Improper Cooling Leads to Product Bridging

DDGS Handling and Storage

Design

Operations

Consistent High-Quality

Products

• Backset

• Sanitation

• Fermentation Management

• Chemical Additions

What You Put in Also Depends on Plant Operations

Backset Considerations

• Backset Decreases Fresh Water Input to Plant

• Amount of Backset Can Affect Viscosity

• Backset Affects Necessity for Chemicals for pH Control

• Amount of Backset Increases Potential for Recycling Contamination and Infection

• Increasing Backset, Increases Non-Fermentable Solids Recycled and Affects Evaporator Performance

Make Taking Shortcuts in Sanitation Unacceptable

• Maintain Schedules

• Monitor Sanitation Chemical Concentrations and Inventories

• Importance of Shift Uniformity and SOP Maintenance

Laboratory

The Lab is the “Eyes” of the Plant.

Without Consistent Lab Sampling and Recording, You are Operating Blind.

•Establish Baseline•Repeatable Results•Shift Uniformity

Consistent Fermentation Monitoring

Process Control with ChemicalsAffects Coproduct Quality

• Sodium Bisulfite or Ammonium Bisulfite

• Sulfuric Acid (pH control or cleaning)

• Sulfamic Acid (cleaning)

• Caustic (cleaning)

• Water Quality (sulfer, minerals)

Inadequate Starch Conversion

Poor Yeast Management

Poor Fermentation Management

Non-Sanitary Operations

Inadequate Product Recovery

Yield Killers

How Much Does Deceased Yield Really Cost ?

1. Using more grain per liter of ethanol produced

2. Increased Energy Consumption

Tangible Costs of Decreased Yield

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90.00 92.00 94.00 96.00 98.00 100.00

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Relative Ethanol Yield

DDGS

Ethanol

Yield, Production & Energy Relationship

Decreased Yield = Decreased Ethanol = Increased

DDGS = Increased Drying Energy

Process Efficiency 97% 96% 95% 94% 93% 92%

Ethanol Yield (L/MT corn) 405.9 401.7 397.6 393.5 389.5 385.4

Feedstock-Corn (MT/day) 1,408 1,422 1,437 1,452 1,467 1,483

Additional DDGS Produced

(MT/day) 12.4 21.5 30.7 39.8 49.1 59.0

Additional Feedstock Cost

(US$/day) $(1,940) $(3,931) $(5,955) $(8,022) $(10,092) $(12,246)

Revenue from Additional DDGS

(US$/day) $1,710 $2,961 $4,233 $5,489 $6,759 $8,126

Energy Cost for Extra Drying

(US$/day) $(391) $(678) $(969) $(1,256) $(1,547) $(1,859)

Total Yearly Loss from Yield

(US$/year) $(217,298) $(576,343) $(941,592) $(1,325,932) $(1,707,628) $(2,092,871)

Base Yield of 410 L/MT and 98% Process Efficiency for Comparison

200,000,000 Liter per Year Ethanol Plant

Is DDGS Undervalued

Thank You for Your Attention