technical corn oil review - iscc system · technical corn oil specifications vs. crude corn oil...

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

Technical 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


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


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


Technical Corn Oil Specifications vs. Crude Corn Oil Specifications


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”


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


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


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

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


Technical Corn Oil vs Soybean Oil


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


About Green Plains

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