Byproducts boost ethanol profits

AURI, the Minnesota Department of Agriculture, Minnesota Corn Growers Association, Minnesota Coalition for Ethanol and the state’s ethanol plants are collaborating to explore sidestream products that could profit the state’s 15 ethanol plants.

“We see this as a chance to identify and enhance revenue streams that will help keep Minnesota a leader in the ethanol industry,” says Steve Olson, manager of AURI’s Marshall field office.

The profitability of ethanol and the distillers’ dry grain most plants produce depends on the price of corn, says AURI oil scientist Max Norris. “When expensive corn comes in, you have a problem.”

But there may be more value to squeeze from the corn — especially from the kernel’s germ. “The majority of folks in the ethanol business grind up everything; they don’t recover the oil in the germ,” Norris says. “You could recover the germ and sell it to companies that extract the oil from it, or you could do your own extraction.”

Other byproducts that could boost profits include industrial alcohol, dietary fiber from corn bran, nutraceutical oil and carotenoids — antioxidants touted as health additives with anti-aging properties. Ice and snow-melting products are other possibilities.

“It’s about taking advantage of existing coproducts that we can enhance,” says Jerry Larson, a farmer and board member of the Minnesota Coalition for Ethanol. “Everyone has a goal to smooth the peaks and valleys in our profits. But we have a lot of feasibility to study to find out if we can do some of these things and make them profitable.”

Gene Fynboh, vice chair of the Minnesota Corn Research and Promotion Council, has been on the forming board of two ethanol plants and “looked at every angle for profitability.” He says it’s time for more research. “It’s important to partner with other entities like AURI and the research councils because we’re not over-producing, we’re under-utilizing.”

Not only do coproducts hold potential for boosting profits, but also for connecting with other industries. All ethanol plants have some amount of “free energy,” Norris says, which could be captured by allied industries such as aquaculture

or hydroponic vegetable production. In Renville, Minn., MinAqua uses heated water from the nearby Southern Minnesota Sugarbeet Cooperative’s processing facility to raise tilapia, a warm-water fish.

In February, representatives from AURI, MDA, MCE and every Minnesota ethanol plant met and formed a task force to dig deeper into potential new uses. “This could result in individual plants wanting to pursue certain avenues, or it could be something larger for the whole industry,” Olson says. “Some opportunities could be met by individual plants, while others may need volume to meet the market.”

Many Minnesota ethanol plants are also nearing the 10-year limit on ethanol subsidies that each plant receives from the state. So it is imperative for farmer-owners to add value to every fraction of their raw materials, Norris says. To make more profit from a grower-owned ethanol plant, “you must start thinking what you can do differently.”