If ethanol producer credits were to be extended, wheat and barley farmers could benefit, an AURI-sponsored study reveals.

Currently, producer credits are limited to the state’s existing 13 dry-mill ethanol plants. Extending the limit to allow a grain-based ethanol facility to be built in northwest Minnesota was proposed in the Minnesota Legislature this year, and although it did not pass, the issue will be back. Marv Zutz, executive director of the Minnesota Wheat and Barley Council, says it would be a big boost for grain farmers. “The numbers we’re getting back are positive for barley usage in ethanol production,” he says.

But to make grain-based ethanol profitable long-term, ethanol plants will have to make more than fuel, the study says. Ideas for coproducts include nutritional supplements, paper pulp and distiller’s grains for feeding livestock. “We have opportunity here, and by golly, it’s fun,” says AURI scientist Max Norris of Marshall.

Measuring profitability

The feasibility study, prepared by BBI International of Cotopaxi, Colo., looks at three potential sites for ethanol production — Angus, Moorhead, or near the American Crystal Sugar plant in Crookston.

A plant that produces 15 million gallons per year, using wheat, corn or barley, could be profitable if the state producer credit was extended, according to the study. Without the credit, a plant yielding 45 million gallons per year would be profitable.

Enough corn is grown around Moorhead to support such a plant and enough barley is grown in the Crookston, Angus and Moorhead areas to support a 15 million gallon plant, says Michael Sparby, AURI project director in Morris who has been working with a northwest Minnesota ethanol cooperative committee.

Coproducts will be essential to the success of any ethanol plant, Sparby says. For example, barley coproducts could generate healthy food additives and beet sugar, unsuitable for food use, could be used in the ethanol process, Norris adds.

Shifts in the wind

A similar study done in 1999 showed promise for a northwest Minnesota farmers’ ethanol cooperative, Sparby says, but markets were not seen as strong enough to support a new plant. “Once the industry shifted, with higher prices, interest was piqued again,” he says.

The most likely scenario, Norris says, will “probably be a barley plant.” Building a plant for “mixed streams” — adaptable to various ethanol-producing feedstocks — would add flexibility to the cooperative, he says. Such a plant could use scabby wheat or corn if barley prices increase substantially.

“The best plant size would be a 30 to 40 million gallon capacity,” Zutz says. “But then other concerns go with that. It’s best to start small and have the potential to expand.”

Possibility fun

“Probably most exciting is the possibility of extracting beta glucans from the barley, selling those into the food market, and putting the waste stream from that process through the ethanol plant,” Zutz says.

Beta glucans, also found in oats, have been shown to lower cholesterol levels in humans. Unlike beta glucans from oats, Zutz says, barley’s beta glucans do not add a nutty flavor to foods, making them desirable for blending with wheat products.

Zutz says the Minnesota Wheat and Barley Council has also looked at making paper pulp from wheat and barley straw. But the key to profitability for any producer-owned plant, Zutz emphasizes, is combining three ingredients: nutritional food products, ethanol and animal feed products.