technical corn oil review - iscc system · technical corn oil specifications vs. crude corn oil...
Post on 11-Sep-2019
26 Views
Preview:
TRANSCRIPT
Technical Corn Oil ReviewDecember 2017
Brian EngelGM, Vegetable Oil Trading
Green Plains Inc. | NASDAQ: GPRE | www.gpreinc.com
Green Plains Partners LP | NASDAQ: GPP | www.greenplainspartners.com
Page 3Technical Corn Oil Review | December 2017
Corn Kernel Components
- One bushel = 56 lbs
- 39.2 lbs of starch
- 8.7 lbs of water
- 5.6 lbs of protein
- 1.9 lbs of tech corn oil
- One bushel of corn produces
- 18.2 lbs of ethanol
- 15.5 lbs of DDGs
- 0.7 lbs of technical corn oil
35.48%
30.14%
33.06%
1.32%
Components of 1 Bushel of Corn
Ethanol DDGS Biogenic Carbon Corn Oil
Page 4Technical Corn Oil Review | December 2017
Wet Mill Ethanol Process
Key Differentiations
• Wet mill separates into four basic components: germ, starch, fiber & gluten protein
• Starch separation is first step and removed from rest of kernel components
• Starch is turned into ethanol while hexane is used to extract corn oil from germ
• Since corn oil is extracted via chemical process, wet mills can recover 100% of the corn
oil available in the corn kernel
Page 5Technical Corn Oil Review | December 2017
Dry Mill Ethanol Process
Key Differentiations
• Dry milling processes the entire corn kernel into flour, without separating into various components
• Water is added to create a mash that then undergoes a fermentation process, which take 40-50 hours
• After distillation, the mash is transferred into distillation columns where anhydrous ethanol is separated
through remaining stillage
• Stillage is sent through another centrifuge that to separates water, proteins, fibers from the solubles
• A third centrifuge is used to remove the remaining water from the syrup stream before adding back into
the stillage stream prior to drying for DDGS production
• Technical corn oil recovery occurs during the third centrifuge process (oil/water separation via gravity)
• Of the 1.9 pounds available, only .7 pounds is actually recovered via natural separation, meaning only
1% of the total content available in a bushel of corn is spontaneously separated
Page 6Technical Corn Oil Review | December 2017
Technical Corn Oil Specifications vs. Crude Corn Oil Specifications
Page 7Technical Corn Oil Review | December 2017
Further Processing Required
• Technical Corn Oil contains elevated levels of FFAs, gums, metals (minerals), color and MIU that need
to be treated before the material can be converted
• For biodiesel, these impurities, without pretreatment, will cause damage to catalytic converters and
lower yields
• For feed use, technical corn oil is not fed directly to livestock, chickens or swine
• For livestock and chickens, technical corn oil is mixed with DDGs, hay, silage, flake, hulls and
other agricultural foliage for better digestibility
• Swine producers prefer a ration that does not include technical corn oil as the material has a
tendency to cause a condition know as “soft bellies”
Page 8Technical Corn Oil Review | December 2017
Technical Corn Oil Supply
• Dry mills started adopting centrifuge recovery systems in 2005/2006
• Dry milling operations account for 62% of total corn oil recovered on an annualized basis
• Ethanol supply and demand is the driving force
• Wet milling operations account for 38% of total corn oil recovered on an annualized basis
• Starch and sweetener demand is the driving force
-
350
700
1,050
1,400
1,750
2,100
2,450
2,800
3,150
3,500
3,850
4,200
4,550
4,900
5,250
5,600
5,950
6,300
U.S. Corn Oil Supply and Demand
Domestic Use (MM Lbs) Exports (MM Lbs) U.S. Recovery (MM Lbs)
source: USDA Grain Crushing Report
Page 9Technical Corn Oil Review | December 2017
TCO Demand For Biofuels
Source: EIA Monthly Biodiesel
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
Canola Oil Corn Oil SoybeanOil
PoultryFat
Tallow &White
Grease
YellowGrease
MM
Lbs
U.S. Bio Feedstock Usage
2014 2015 2016 2017
-
15
30
45
60
75
90
105
120
135
150
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MM
Gals
Monthly U.S. Biodiesel Production (MM Gals)
2014
2015
2016
2017
• Technical Corn Oil is the second most used feedstock for domestic biodiesel production behind soybean oil @
13.17% feedstock share
• International feedstock demand remains firm with monthly exports running 17 – 20mm lbs
Page 10Technical Corn Oil Review | December 2017
TCO Demand For Feed
• There are three main types of distillers grains: traditional, with more than 10% crude fat; low-fat, with 5% to 9% crude
fat; and de-oiled, with less than 5% crude fat
• Low-fat distillers grains will likely result in a lower energy content
• Fat content not main driver when determining ration: Oil left in DDGS after recovery is LESS digestible than the oil that
is recovered during the dry milled ethanol process
• Recovered oil was 92% digestible while the oil left in the grain is only 50% digestible
• U.S. ethanol producers recovered 3.1 billion pounds of technical corn oil in 2016, of that 866 million pounds was used
for feed or 29% of total production
• Poultry producers supplement poultry rations with technical corn oil due to the unsaturated fats present in the oil which
are easier for chicks to digest and the carotenoids present which give chicken skin a more appealing pigment
• Livestock producers supplement livestock rations with technical corn oil at 2% of the entire ration
• Technical corn oil is limited in swine diets, as it is attributed to “soft bellies,” a negative impact on bacon quality
• Research has shown efficiency gains in the DDGs drying process as a result of technical corn oil recovery
• Cleantech Corp published study indicating a 10% improvement in drying efficiency
• National Corn to Ethanol Research Center study claims >4% improvement in drying efficiencies
Sources: http://www.grains.org/news/20160107/usgc-study-demonstrates-new-value-corn-distillers-oil-poultry
http://nationalhogfarmer.com/business/different-distillers-grains-may-change-feed-rations
http://www.nd.gov/ndic/renew/meeting0903/r005-b-prop.pdf
Page 11Technical Corn Oil Review | December 2017
Technical Corn Oil vs Soybean Oil
Page 12Technical Corn Oil Review | December 2017
Technical Corn Oil Summary
Recovered from liquid stream, natural water / oil separation
Recovery started in 2005/2006
Less than 2% of total corn is recovered as oil
Industry recovering over 3.1 billions lbs /year
Requires further processing than other fats and oils
Offered to fuel and feed markets
Feedstock for US biodiesel production approximately 13% of total use
Feed markets significantly deviate on value of oil content
Page 13Technical Corn Oil Review | December 2017
About Green Plains
Page 14Technical Corn Oil Review | December 2017
About Green Plains
www.gpreinc.com
top related