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Byproducts Big Business for Grain Mills

August 11, 2014
Distillers Grains
  

An Indiana feed mill is now selling more grain byproducts than ever.
By: MICHAEL RESCHKE, The Herald-Times

MARTINSVILLE, Ind. (AP) — About 600 pounds of corn gluten falls into a buggy at Morgan County Feed. It's just after 8 a.m., and the morning sun is illuminating the particles of feed swirling through the air inside the county's oldest ongoing business.

"We've been here for 150 years," said owner Scott Whaley.

Well, he hasn't been there that long. Whaley bought the business in 1998, and he soon thought he'd made a mistake. Back then, they were doing a lot of 500- and 600-pound orders. Now, they could do 50 tons in a day.

"The feed business has been very good," Whaley told The Herald-Times.

There's a couple of reasons for that. The first is a lack of competition.

"None of these places are left," he said. "Feed mills are few and far between."

The other is having the foresight to seize an opportunity.

Out back, beneath the massive steel grain bins, Whaley explained that most of what he sells now is byproduct.

"I got in on the ground floor with soy hulls," he said. "When I first started out, you could buy them for hardly nothing. Now, they're one of the hottest commodities on the market."

It appears one man's bust is another's boom, because many of the reasons byproducts have become so popular are the same reasons you're paying historically high prices for beef.

The Energy Policy Act of 2005 created the country's first renewable fuel volume mandate in the United States. Now corn is being used not only for food and feed, but also for fuel. The historic 2012 drought reduced the total production of corn, but not the renewable fuel standard.

With less corn to go around, the price spiked.

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