By Cheryl Anderson
DTN Staff Reporter
OMAHA (DTN) -- The Food Safety Modernization Act is described by the U.S. Food and Drug Administration as "the most sweeping reform of our food safety laws in more than 70 years." With a lengthy list of new rules and regulations, FSMA has many implications for the feed and grains industry as well as ethanol producers.
The rules were recently finalized by FDA and will apply to any domestic or foreign facilities that manufacture, process, pack or store human food, animal feed or pet food.
The final rule, published in the federal register on Sept. 17, contains current good manufacturing practices for all eligible facilities, as well as preventive controls for both human food and animal feed. Two additional rules -- the Foreign Supplier Verification Program rule and the Sanitary Transportation of Food and Feed Rule -- will be issued by Oct. 31 of this year, and by March 31, 2016, respectively.
The final rule is more than 600 pages long; however, David Fairfield, vice president of feed services for the National Grain and Feed Association, summarized some of the implications for the feed industry in a recent webinar hosted by the National Grain and Feed Association.
The rule mandates new training and qualification requirements for employees in human food and animal feed facilities, such as adequate education and training necessary for duties, as well as training in animal feed hygiene and safety, employee health and personal hygiene. Training must be given before employees can work in production operations, and must include periodic refresher training. Training records must be maintained for two years.
Eligible facilities must meet requirements for maintenance, cleanliness and pest control. Also, water supply, plumbing design and garbage control/disposal must be adequate for the facility's operation and safety.
Raw materials not used in animal feed (such as fertilizers and pesticides) must be stored in an area separate from where feed is manufactured, processed or exposed. Also, raw materials must be examined before processing to prevent contamination and minimize deterioration.
A number of regulations regarding holding and distribution include requirements that shipping containers and bulk vehicles must be examined prior to use to prevent contamination. Feed returned from distribution must be identified and segregated until assessed for safety.
Exemptions from current good manufacturing practices include operations solely engaged in holding and/or transporting raw agricultural commodities (such as grain elevators); establishments solely engaged in holding, processing or packing of nuts and hulls; or establishments solely engaged in ginning of cotton. "Holding" includes any activities involved with storage or distribution of food, such as drying, treating, weighing, blending, sampling or grading grain.
Hazard analysis and risk-based preventive controls require development and implementation of a written animal feed safety plan, including a written hazard identification and analysis for all "known or reasonably foreseeable hazards." The new rule details management activities for hazards requiring a preventive control, such as monitoring, time frames for corrective actions, recall plans, etc.
Animal feed safety plans must be developed and overseen by a qualified employee who has completed training equivalent to standardized curriculum recognized by FDA or is qualified through job experience to develop and apply a feed safety system.
Exempted from the preventive controls rule are farms, facilities solely engaged in the storage of raw agricultural commodities (other than fruits and vegetables) intended for further distribution or processing, and facilities solely engaged in storage of packaged animal food that does not require time/temperature controls.
The supply-chain program rule applies to any covered facility that has identified a hazard requiring a preventive control that relies on its suppliers to control the hazard. Such facility must have written procedures for such activities as receiving raw materials or ingredients only from approved suppliers, audits, sampling and testing, etc.
The list of who is exempt from the supply-chain program is similar to the exemptions for Preventive Controls, with the addition of facilities that do not identify a hazard requiring a preventive control, and facilities that do identify a hazard requiring a preventive control, but choose not to rely on the supplier to control the hazard.
IMPLICATIONS FOR ETHANOL PLANTS
A second webinar was held recently to address the implications of the FSMA rules on ethanol plants. Since FSMA rules apply to any facility that handles domestic or imported feed for animals, ethanol plants that process dried, wet or modified distillers grains or corn distillers oil must comply.
Many of the same rules that govern grain and feed operations also apply to ethanol plants. However, of particular concern for ethanol plants are the rules regarding chemical, microbial or other testing used to detect mycotoxins, such as aflatoxin, deoxynivalenol, fumonsin and zearalenone that can appear in corn and are concentrated in the resulting distillers grains.
Richard Coulter, senior vice president, scientific and regulatory affairs for Phibro Animal Health Corp., said that FSMA will not affect the legal requirements for processing aids in ethanol production, for generally recognized as safe (GRAS) feed ingredients such as yeast, enzymes, water treatment and anti-microbials.
Ethanol plants must have infection control programs, as well as plans for assessing and managing residues from control products such as antibiotics. Even though no management or hazard classification strategy is being mandated by FDA, Coulter said plants must have a strategy for mycotoxins for incoming grain, including anticipating risks such as weather, testing new crop more frequently and retaining DDGS samples.
He added that preventive controls for mycotoxins should include a monitoring program for incoming grain and a validation program for outgoing products, and that all strategies, protocols and test results should be documented and readily available.
COMPLIANCE DATES
The compliance dates for current good manufacturing practices and preventive controls for small businesses (fewer than 500 full-time employees) are Sept. 18, 2017, for CGMP and Sept. 17, 2018, for preventive controls. The compliance dates for very small businesses (generating less than $250,000 for the previous three years) are Sept. 17, 2018, for CGMPs and Sept. 17, 2019, for preventive controls. Compliance dates for all other businesses are Sept. 19, 2016, for CGMPs and Sept. 18, 2017, for preventive controls.
For the supply-chain program, the receiving facility's supplier is required to comply with the CGMP requirements by Sept. 18, 2017, or six months after the receiving facility's supplier of that raw material or other ingredient is required to comply with the applicable rule, whichever is later.
ASSISTANCE/TRAINING
The U.S. Food and Drug Administration has created the Food Safety Preventive Controls Alliance to develop training courses and technical information to help small- and medium-sized companies comply with the new preventive controls rules mandated by FSMA.
The FSPCA consists of government officials, academic and industry representatives that will develop standardized hazard analysis and preventive controls training and education modules, as well as assisting FDA in developing industry specific guidelines.
For more information, visit the FSPCA section of the FDA website: http://1.usa.gov/…
To read the NGFA summary of the final rule, visit the NGFA's website: http://bit.ly/…
Cheryl Anderson can be reached at [email protected]
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IN THE NEWS
CoBank Report: Ethanol Margins Dependent on Distillers, Ethanol Prices
A recent report by CoBank predicts that the U.S. ethanol industry may experience only thin profit margins in 2015-2016, and that those profits may depend on prices of ethanol and distillers grains, according to a news release on the CoBank website (http://bit.ly/…).
The report, titled "Ethanol Industry Rebalances," examined the changing dynamics in the ethanol marketplace. After ethanol prices and plant margins plummeted in the last half of 2014, the industry rebalanced itself in 2015, keeping ethanol supply and demand well-balanced with positive earnings.
In the coming year, plants will likely experience positive and negative shifts, but should have thin profits, according to the report.
Corn prices are predicted to be fairly stable, but the prices of ethanol and distillers grain will dictate profits, according to Dan Kowalski, author of the report and director of CoBank's Knowledge Exchange Division.
Prices of distillers grains have been on a downward trend since mid-July, due largely to sluggish export demand, as well as slow domestic demand. However, the falling prices have resulted in improving the value of distillers grains relative to corn, which is prompting livestock producers to increase the inclusion rate of distillers in their rations.
"Ethanol profitability will largely hinge on two key factors: the volatility of energy prices and the industry's ability to maintain strong export sales," said Kowalski.
The report also warns that foreign markets could pose a risk, as China is expected to change policies which would discourage imports of corn-alternative feed grains such as distillers grains. China has been the largest buyer of U.S. distillers grains, so a cut in exports to China could present significant challenges to ethanol profits.
Cheryl Anderson can be reached at [email protected]
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DTN WEEKLY DDG SPOT PRICES
| | | CURRENT | PREVIOUS |
| COMPANY | STATE | | 10/9/2015 | 10/2/2015 | CHANGE |
| Bartlett and Company, Kansas City, MO (816-753-6300) |
| Missouri | Dry | $135 | $148 | -$13 |
| | Modified | $65 | $65 | $0 |
| CHS, Minneapolis, MN (800-769-1066) |
| Illinois | Dry | $128 | $130 | -$2 |
| Indiana | Dry | $115 | $115 | $0 |
| Iowa | Dry | $110 | $110 | $0 |
| Michigan | Dry | $122 | $120 | $2 |
| Minnesota | Dry | $115 | $115 | $0 |
| North Dakota | Dry | $115 | $115 | $0 |
| New York | Dry | $160 | $160 | $0 |
| South Dakota | Dry | $115 | $115 | $0 |
| MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) |
| Kansas | Dry | $125 | $125 | $0 |
| POET Nutrition, Sioux Falls, SD (888-327-8799) |
| Indiana | Dry | $120 | $125 | -$5 |
| Iowa | Dry | $110 | $115 | -$5 |
| Michigan | Dry | $125 | $130 | -$5 |
| Minnesota | Dry | $108 | $110 | -$2 |
| Missouri | Dry | $125 | $130 | -$5 |
| Ohio | Dry | $125 | $130 | -$5 |
| South Dakota | Dry | $108 | $110 | -$2 |
| United BioEnergy, Wichita, KS (316-616-3521) |
| Kansas | Dry | $130 | $130 | $0 |
| | Wet | $50 | $50 | $0 |
| Illinois | Dry | $136 | $136 | $0 |
| Nebraska | Dry | $130 | $130 | $0 |
| | Wet | $50 | $50 | $0 |
| U.S. Commodities, Minneapolis, MN (888-293-1640) |
| Illinois | Dry | $120 | $120 | $0 |
| Indiana | Dry | $115 | $115 | $0 |
| Iowa | Dry | $105 | $105 | $0 |
| Michigan | Dry | $115 | $115 | $0 |
| Minnesota | Dry | $100 | $100 | $0 |
| Nebraska | Dry | $115 | $115 | $0 |
| New York | Dry | $140 | $140 | $0 |
| North Dakota | Dry | $115 | $110 | $5 |
| Ohio | Dry | $115 | $115 | $0 |
| South Dakota | Dry | $105 | $105 | $0 |
| Wisconsin | Dry | $115 | $120 | -$5 |
| Valero Energy Corp., San Antonio, TX (402-727-5300) |
| Indiana | Dry | $115 | $110 | $5 |
| Iowa | Dry | $100 | $105 | -$5 |
| Minnesota | Dry | $100 | $105 | -$5 |
| Nebraska | Dry | $115 | $110 | $5 |
| Ohio | Dry | $125 | $125 | $0 |
| South Dakota | Dry | $100 | $100 | $0 |
| Western Milling, Goshen, California (559-302-1074) |
| California | Dry | $180 | $180 | $0 |
| *Prices listed per ton. |
| Weekly Average | | $116 | $118 | -$2 |
| The weekly average prices above reflect only those companies DTN |
| collects spot prices from. States include: Missouri, Iowa, Nebraska, |
| Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan, |
| Wisconsin and Indiana. Prices for Pennsylvania, New York and |
| California are not included in the averages. |
*The spot prices gathered by DTN are only intended to reflect general market trends and may vary. Please contact individual plant or merchandiser for exact prices.
If you would be willing to take a weekly phone call and have your distiller grains spot prices listed in this feature, please contact Cheryl Anderson at (308) 224-1527 or (800) 369-7875, or e-mail [email protected].
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| VALUE OF DDG VS. CORN & SOYBEAN MEAL | |
| Settlement Price: | Quote Date | Bushel | Short Ton | |
| Corn | 10/8/2015 | $3.9125 | $139.73 | |
| Soybean Meal | 10/8/2015 | | $303.80 | |
| DDG Weekly Average Spot Price | | | $116.00 | |
| DDG Value Relative to: | 10/9 | 10/2 | 9/27 |
| Corn | 83.02% | 84.99% | 89.54% |
| Soybean Meal | 38.18% | 39.00% | 40.34% |
| Cost Per Unit of Protein: | | | |
| DDG | $4.64 | $4.72 | $4.88 |
| Soybean Meal | $6.40 | $6.37 | $6.37 |
| Notes: |
| Corn and soybean prices taken from DTN Market Quotes. DDG |
| price represents the average spot price from Midwest |
| companies collected on Thursday afternoons. Soybean meal |
| cost per unit of protein is cost per ton divided by 47.5. |
| DDG cost per unit of protein is cost per ton divided by 25. |
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USDA MARKET NEWS/DISTILLER GRAINS PRICES
USDA WEEKLY DISTILLERS GRAINS SUMMARY (Oct 2, 2015)
| Dried | Modified | Wet |
| FOB PLANT PRICES PER TON |
| Iowa | 105.00-120.00 | 45.00-65.00 | 35.00-40.00 |
| Minnesota | 110.00-125.00 | 60.00 | 34.00-40.00 |
| Nebraska | 115.00-135.00 | 62.00-70.00 | 45.00-55.00 |
| South Dakota | 108.00-115.00 | 55.00-66.00 | 38.00-43.00 |
| Wisconsin | 120.00-145.00 | 53.00-60.00 | NQ |
| Eastern Corn Belt | 117.00-145.00 | 55.00-62.00 | NQ |
| Kansas | 135.00-160.00 | NQ | 45.00-65.00 |
| Northern Missouri | 125.00-140.00 | NQ | 40.00-42.00 |
| DELIVERED PRICES PER TON |
| CIF NOLA | 154.00-161.00 | | |
| Pacific Northwest | 168.00-175.00 | | |
| California | 165.00-172.00 | | |
| Texas Border (metric ton) | 185.00-200.00 | | |
| Lethbridge AB | 145.00 | | |
| Chicago | 128.00-140.00 | | |
Dried Distillers Grain: 10% Moisture
Modified Wet Distillers: 50-55% Moisture
Wet Distillers Grains: 65-70% Moisture
CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Oct 6, 2015)
Distillers Dry Grains
Rail to California Points 172.00 dn 2.00
FOB Truck to California Points 175.00-186.00 unch-up 11.00
PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue Sep 29, 2015)
Offers for Distillers Dried Grains delivered in September by rail to feed mills in the Pacific Northwest were steady to 2.00 lower from 169.00-180.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were steady to 2.00 lower from 187.00-195.00.
*All prices quoted per ton unless otherwise noted.
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NASS/USDA MONTHLY CO-PRODUCTS PRODUCTION
Dry and Wet Mill, Co-products and Products Produced - United States
June 2015 - August 2015
Sep 1, 2015
Highlights:
Dry mill co-product production of distillers dried grains with solubles (DDGS) was 1.94 million tons during August 2015, down 3 percent from July 2015 and down 2 percent from June 2015. Distillers wet grains (DWG) 65 percent or more moisture was 1.15 million tons in August 2015, up 1 percent from July 2015 and up 1 percent from June 2015.
Wet mill corn gluten feed production was 343.5 thousand tons during August 2015, up 3 percent from July 2015 and up 7 percent from June 2015. Wet corn gluten feed 40 to 60 percent moisture was 290.7 thousand tons in August 2015, down 8 percent from July 2015 and down 5 percent from June 2015.
| Co-products and Products | May 2015 | Jun 2015 | Jul 2015 |
| Dry Mill | | tons | |
| Condensed distillers solubles (CDS-syrup) | 145,244 | 149,927 | 155,218 |
| Corn oil | 120,582 | 125,497 | 121,810 |
| Distillers dried grains (DDG) | 407,259 | 450,829 | 452,969 |
| Distillers dried grains with solubles (DDGS) | 1,976,508 | 2,000,851 | 1,943,205 |
| Modified distillers wet grains (DWG) <65% moisture | 1,136,491 | 1,137,600 | 1,151,047 |
| Modified distillers wet grains (DWG) 40-64% moisture | 367,092 | 350,460 | 341,837 |
| Wet Mill | | | |
| Corn germ meal | 63,188 | 68,528 | 66,563 |
| Corn gluten feed | 321,209 | 333,828 | 343,476 |
| Corn gluten meal | 92,237 | 97,130 | 96,072 |
| Corn oil | 51,281 | 53,364 | 52,514 |
| Wet corn gluten feed 40-60% moisture | 214,995 | 225,675 | 217,778 |
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RFA WEEKLY U.S. LIVESTOCK FEED PRODUCTION
| CO-PRODUCT OUTPUTS (metric tons) |
| Week Ending | Distillers Grains | Corn Gluten Feed | Corn Gluten Meal | Total Feed | Corn Oil (lbs.) |
| 9/04/15 | 94671 | 9787 | 1812 | 106270 | 5635945 |
| 9/11/15 | 94967 | 9818 | 1818 | 106603 | 5653594 |
| 9/18/15 | 92695 | 9583 | 1775 | 104052 | 5518284 |
| 9/30/15 | 93189 | 9634 | 1784 | 104606 | 5547700 |
*Information from 2010 Weekly U.S. Fuel Ethanol/Livestock Feed Production report (http://www.ethanolrfa.org/…)
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DDG LINKS/RESOURCES
Organizations
*Distillers Grains Technology Council
http://www.distillersgrains.org
*National Corn Growers Association Corn Distillers Grains Brochure
http://ncga.com/…
*Iowa Corn
http://www.iowacorn.org/…
Nebraska Corn Board
http://www.nebraskacorn.org/…
*Renewable Fuels Association - Ethanol Co-Products
http://www.ethanolrfa.org/…
*American Coalition for Ethanol
http://www.ethanol.org/…
*U.S. Grains Council
http://www.grains.org/…
*South Dakota Corn Utilization Council
http://www.drieddistillersgrains.com
Government Sites
*Iowa Department of Agriculture and Land Stewardship/Office of Renewable Fuels & Coproducts
http://www.distillersgrains.com
University Sites
*University of Minnesota - Distillers Grains By-Products in Livestock
and Poultry Feed
http://www.ddgs.umn.edu
*University of Illinois - Illinois Livestock Integrated Focus Team Distillers Grains site
http://ilift.traill.uiuc.edu/…
*University of Nebraska - Beef Cattle Production By-Product Feeds site
http://beef.unl.edu/…
*University of Nebraska Extension
http://ianrpubs.unl.edu/…
*Iowa Beef Center - Iowa State University
http://www.iowabeefcenter.org/…
*University of Missouri - Byproducts Resource Page
http://agebb.missouri.edu/…
*South Dakota State University - Dairy Science Department - Dairy cattle research
http://dairysci.sdstate.edu/…
(select "Distillers Grains" from the topic menu)
*Purdue University Renewable Energy Web Site
http://www.extension.purdue.edu/…
(select "Biofuels Co-Products from the menu)
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DDG CONFERENCES
If you are sponsoring or know of any event, conference or workshop on distillers grains, and would like to list it in the DTN Weekly Distillers Grains Update, please contact Cheryl Anderson (see contact info below).
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We welcome any comments/suggestions for this feature. Please let us know what information is valuable to you that we could include in the Distillers Grains Weekly Update. Please feel free to contact Cheryl Anderson at (402) 364-2183, or e-mail [email protected].
(AG/SK)
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