Adjusting%20to%20an%20Ethanol%20World

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Adjusting to an Ethanol World
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8/30/06
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63
Capacity 129 of 2006 crop
Iowa corn processing ethanol plants, current
planned, 10/26/06
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5.5 Bil. Bu. For Ethanol
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Livestock Marketing Information Center
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Livestock Marketing Information Center
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Livestock Marketing Information Center
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DDGS Production and Usage

• Potential production Mil Ton
• 5.5 Billion Bu. Corn 46.8
• Potential use
• COF _at_ 20 7.10
• Dairy _at_ 20 6.13
• Hogs _at_ 15 6.72
• Total 19.95
• Excess for export or use 26-27

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Situation

• More ethanol and more DGS
• Higher corn prices and more corn acres
• Higher land prices
• Lower calf and yearling prices
• Lighter carcasses and fewer Choice

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Internal Factors
Strengths
Weaknesses
External Factors
Opportunities
Threats
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Internal Factors
Strengths Using MIG Close to coproduct Own
land Produce corn High equity position
Weaknesses Nearing retirement Sell feeder
cattle No facilities or equipment to background
or feed coproduct
External Factors
Opportunities Increasing land prices DGS
nearby More corn stalks available Limited herd
expansion or contraction
Threats Higher corn prices Lower calf
prices Fewer cows will lead to less infrastructure
Case 1
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Internal Factors
Strengths Young, long horizon Good nutrition and
management skills Facilities and equipment to
background and/or feed Packers nearby
Weaknesses High debt level Rent most of
pasture Limited labor available
External Factors
Opportunities DGS nearby More corn stalks
available Limited herd expansion or contraction
Threats Higher rental rates Losing pasture to
crop production Lower calf prices Fewer cows will
lead to less infrastructure
Case 2
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Strategies

• Adopt management intensive grazing
• Utilize DGS and/or CDS on pasture or in winter
  feed
• Convert hay to pasture and use aftermath with
  DGS/CDS for winter feed
• Early wean and/or creep feed to run more cows on
  same acres. Improve grading