Making the most of milo

Jan 31, 2014
by DTN

—Sorghum faces challenges as ethanol feedstock

As lower prices and shrinking water reserves threaten King Corn’s reign in the Western Corn Belt, its hardy and long-neglected cousin sorghum seems poised for a comeback, if it can overcome a few pesky marketing challenges.

Sorghum’s fighting an uphill battle to gain a share of ethanol production, and ethanol experts in Kansas stress that farmers need to manage the crop with the same care they’ve shown corn.

One of the primary factors working in sorghum’s favor among farmers—lower corn prices—has actually threatened its appeal as an ethanol source. Ethanol plants that had shifted toward sorghum veered back to corn as prices fell, said Greg Krissek, a manager with Kennedy & Coe, a national accounting and consulting firm.

The irony wasn’t lost on Jeff Torluemke, President of Western Plains Energy, an ethanol plant in Oakley, KS.

“I’m standing up here a real hypocrite because Western Plains Energy was promoting sorghum, and we’ve had some projects put in place to use 100 percent sorghum, but as I stand here today, we’re using 95 percent corn,” he told a crowd of sorghum producers at SorghumU, a conference held in four locations throughout January.

It’s not just prices, he said.

Weather and management play a role, as well.

Western Plains aims for an ethanol conversion rate of 2.7 - 2.8 gallons per bushel of sorghum. Drought conditions in Kansas contributed to a low starch sorghum crop that can only produce 2.5 - 2.6 gallons per bushel.

“Since we switched back to corn, we’ve been getting 2.65 - 2.8 gallons per bushel,” Torluemke said.

Sorghum is capable of reaching a higher conversion rate if growers manage it as intensively as they manage corn, Torluemke told DTN.

“Milo has the potential to be just as good, but typically it’s grown on more-marginal ground, and corn is grown on the best ground,” he said. “But when milo is grown on the best ground, with full resources, it’s an excellent ethanol source for us.”

On a producer panel at the end of the conference, growers reiterated this point.

“If you’re going to plant sorghum, don’t treat it as a stepchild,” said Bill Greving, a farmer from Prairie View, KS. “Treat it just like you would any other crop you plant. Manage it to the fullest extent you can, and it will perform for you.”

Greg Graff, a Marienthal, KS., farmer, said growers will probably start moving more irrigated ground to sorghum as water restrictions increase, but right now irrigated corn is still more profitable.

“We need more markets to get the price of milo up,” he said.

In 2012, the EPA ruled that sorghum-based ethanol can qualify as an advanced biofuel under the Renewable Fuel Standard.

Under the RFS, an advanced biofuel must result in a 50 percent reduction in greenhouse gas (GHG) emissions compared to traditional fuels such as gasoline, while conventional biofuels such as corn-based ethanol only require a 20 percent reduction. Sorghum-based ethanol alone doesn’t meet this requirement, but it can when it’s combined with certain other technologies. One such technology is a biogas digester, which turns organic waste into a gas that’s used for heating or electricity.

For example, a dry-mill ethanol plant that uses a biogas digester to generate some of its heat and power would reduce sorghumbased ethanol’s GHG emissions by 50 percent.

Western Plains Energy has installed the largest biogas digester in North America, which could bump the value of grain sorghum above corn for them when it’s fully operational, Torluemke said.

“We could actually afford to pay more for grain sorghum” compared to corn, he said. The digester was supposed to go fully online in 2013, but the plant is still working out kinks, Torluemke said. The EPA estimates there are 220 such digesters operating in the U.S., mostly in livestock operations.

The advanced biofuel designation opens the door for sorghum ethanol to California’s fuel market because it meets the state’s Low Carbon Fuel Standard, which requires that fuels sold in California meet a declining target for carbon emissions over the next decade, Kennedy & Coe’s Krissek said.

“Where we’re located in western Kansas, rail provides an opportunity to get to California with moves that are a little less expensive than our friends in Iowa and Illinois,” he said. “It has generated dollars for some of the plants in Kansas, so I think that’s pretty exciting.” — Emily Unglesbee, DTN