Brazil’s corn industry discovering DDGS

DDG and DDGS at a warehouse belonging to the company Inpasa. Photo: Daniel Azevedo

In Brazil, they call it “grão dourado,” or the “golden grain” – corn. In the last decade new opportunities for corn have emerged in the country, enabling it to become even more valorised: by turning it into ethanol for fuel consumption and selling its by-products for animal nutrition. All About Feed travelled to Mato Grosso state to learn more.

Without a doubt, one of the most dynamic business sectors in Brazil’s agro-industry is that of corn biorefineries. In just 7 years since the crop season 2017-2018, the corn biorefining industry has increased production more than 12-fold. In those years, Brazil’s corn ethanol production surged from 520 million litres to 6.3 billion, and further growth is expected. In the next decade it is expected that this growth will continue and at least double to 14 billion litres.

That vast increase is not so much related to Brazilian agricultural policy initiatives or massive subsidy programmes. Rather it can be explained by 2 concurrent developments:

The first among these is the energy transition in the transport sector, i.e. using ethanol instead of fossil fuels. Traditionally, Brazil’s biofuel consumption has been relatively high – as about 25% of all transport fuels are biofuels. Most of the cars in Brazil, for instance, are equipped with flexible propulsion systems, making them able to use ethanol as well as gasoline at the same time. For a long time, the most common biofuel in Brazil was ethanol from sugarcane. Since the crop season 2016-2017, however, corn ethanol has emerged, rising from virtually zero to capture 20% of the vast Brazilian biofuel market in 2024.
A second reason for the massive success of corn biorefineries relates to the ability to valorise its by-products as well. After all, worthwhile feed components can be made from the by-products of corn ethanol production, such as distillers’ dried grains (DDG) as well as distillers’ dried grains with solubles (DDGS) – for the difference between the 2, see the Box “By-products of the corn industry.”

Guilherme Nolasco, president of Brazil’s National Corn Ethanol Union (UNEM).

With the growth of ethanol biorefineries, the production of both DDG and DDGS also jumped in Brazil – from 530,000 tonnes in 2018 to 3.63 million tonnes in 2024. Guilherme Nolasco, president of Brazil’s National Corn Ethanol Union (UNEM), says, “The world currently consumes 117 billion litres of ethanol annually and this figure is projected to reach 300 billion by 2030, for use in vehicles, planes with sustainable aviation fuel and ships, in addition to the growing demand for animal protein and other products.”

The “golden grain”

2024 is not considered to be a very good year in terms of the harvest in Brazil. Even in a “bad” year, however, Brazil’s corn harvest is expected to reach 112.7 million tonnes, up 54.4% from a decade ago.

That upward tendency is projected to continue. Official projections by Brazil’s Ministry of Agriculture and Livestock (MAPA), the country’s production will reach 176.9 million tonnes by the crop season 2032-2033. A projection that makes sense, when considering that corn will not only be used for food and feed purposes, but also to produce ethanol, corn oil, DDG, DDGS and other by-products. Each tonne of the so-called “golden grain” can produce 450 litres of ethanol, 212 kg of DDG or DDGS, and 19 litres of corn oil.

Corn is now Brazil’s second crop after soybeans. Thanks to its favourable climate, Brazilian farmers can grow 3 crops per year in the same area. In Mato Grosso state for instance, in the Central-West region bordering Bolivia, on the same land in 1 year, farmers can harvest soybeans, corn and a third crop of choice. A corn crop typically takes up less space than soybeans, Nolasco explains.

“Currently, only about 60% of the first crop area (soybeans) is needed for second crop (corn). In Mato Grosso state this is around 20 million hectares In addition, the conversion of degraded pasture land could bring another 26 million hectares into this cycle.”

Addition of factories

The projection of increasing the corn supply, combined with the demand for green biofuels and sustainable foods, has led to a real boom in plants dedicated to grain processing. According to UNEM data, there are currently 21 plants for corn biorefining in Brazil – the vast majority (over 80%) having emerged in the last 5 years. Of this total, the lion’s share (18 refineries) can be found in the Central-West region including Mato Grosso state. In addition, there is 1 in the South (in the states known for pig and poultry production), while another 1 is located in the South East (the region including the cities Rio de Janeiro and São Paulo), and 1 is located in the North East region.

The emergence of more plants will continue, as another 9 are about to be taken into use, including 5 further plants in Mato Grosso state. In addition, UNEM says that at least another 11 plants are in the planning stages. For this feature, All About Feed visited 3 corn biorefineries in the State of Mato Grosso namely, FS, Inpasa and ALD (see the Box Visit to 3 corn biorefineries in Mato Grosso).

DDG world market

Corn ethanol plants produce both DDG and DDGS, which are considered to be high-quality alternatives that can be used for animal production; think of pigs, poultry, beef cattle, dairy cows, sheep, fish and pets. Nolasco says, “DDG and DDGS are strategic and advantageous alternatives for farmers, whether for the intensification of animal production, conversion of degraded areas, or adding value to corn by-products.”

Currently, the United States dominates that market as it is the largest corn ethanol producer. The United States DDGS exports exploded from 5 million tonnes in 2009 to more than 11 million tonnes in the season ending 2023 (going to 58 countries). Of that amount, Mexico purchased most, buying more than 20%, while South Korea was second. Vietnam, Indonesia and Canada completed the list of top-5 importers for the season ending 2023.

In comparison, in 2024, Brazil produces about 4 million tonnes of DDG and DDGS and is expected to export between 800,000 and 1 million tonnes. To illustrate the potential: the country’s feed production is about 83 million tonnes.

Global market for Brazil’s produce

Nolasco says that the Brazilian DDG and DDGS products are already being shipped around the globe, with exports to Indonesia, Japan, New Zealand, South Korea, Spain, Turkey and Vietnam. In addition, China is also expected to open its market soon for Brazilian DDG and DDGS products. Future shipments could provide further opportunities for Brazil to expand its global position in animal husbandry. It could produce even cheaper and better products domestically and help provide better products worldwide.

Nolasco concludes, “Therefore, the DDG and DDGS market is an investment strategy. We didn’t have a production chain previously, but today we do. We believe that DDG and DDGS could represent up to 25% of the corn biorefinery business.”

By-products of the corn industry: DDG and DDGS

Both DDG and DDGS are known for their high protein levels, energy, fibre, amino acids as well as yeast components. That is why both DDG and DDGS are considered potential alternatives for soybean meal. The 2 are different products.

DDG is short for Distiller’s Dried Grains. That is a solid residue after removing ethanol from the fermentation liquid. DDG is typically used in animal feed as it is rich in protein and fibre.

DDGS (Distiller’s Dried Grains with Solubles) is similar to DDG but has been enriched with enzymes for further fermentation. DDGS is therefore richer in protein and energy than DDG for animal feed and can be a partial substitute for other ingredients such as corn or soy.

The first time DDGS made a vast entry on a global level was around 2010, when pushed by the market, US gas companies also started adding ethanol to their fuels in order to be less dependent on fossil fuels. This led to a surge in the emergence of DDGS on the North American market. A debate flared up that can be summarised as the “food vs feed” discussion: would animal feed become more expensive if fuels were to take a lot of corn from the market?

DDG and DDGS are both competitive alternatives for animal husbandry because, depending on the process, their products can contain 18-43% protein and 20-40% energy. In terms of production, however, costs are 15% lower than other feed ingredients.

Visit to 3 corn biorefineries in Mato Grosso

All About Feed visited 3 corn biorefineries in the State of Mato Grosso namely, FS at Lucas do Rio Verde municipality, Inpasa at Nova Mutum and ALD at Tangará da Serra.

FS

The FS Bioenergy factory in Lucas do Rio Verde. Photo: Daniel Azevedo

FS (Fueling Sustainability) was a pioneer in the national market by starting operations at its plant in Lucas do Rio Verde in 2017. Currently, the company has 2 other units, in the municipalities of Sorriso and Primavera do Leste. In total, the company processes 5.1 million tonnes of corn to produce 2.3 billion litres of ethanol, 1.8 million tonnes of DDG/DDGS and 86,000 tonnes of corn oil.

The FS group presents its DDG as a High Protein DDG (HPDDG). According to the company, the product is rich in essential nutrients, offering high protein and energy levels, which are vital for various animal species. “This sustainable option improves animal nutrition and achieves 15% better cost-efficiency when compared to soybeans,” argues Brian Mark, a commercial trader at FS Bioenergy. According to him, FS HPDDG is fortified with amino acids, minerals, proteins, ether extract, yeast and other essential nutrients. Brian explains that FS HPDDG Rumen Undegradable Protein (RUP) offers more undegraded protein for better nutrient uptake than soybean meal (63.1 vs 34.1 % protein), the presence of yeast for digestion and immunity and high energy content. See Table 1 for a comparision between FS HPDDG and Soybean Meal.

Inpasa

Corn biorefinery products at Inpasa. Photo: Daniel Azevedo

The Inpasa Group (Indústria Paraguay SA), despite having started in neighbouring South America, belongs to a Brazilian entrepreneur and is the largest producer of corn ethanol in Brazil. This year, the group will process 9 million tonnes of corn, 4.1 billion litres of ethanol, 2.2 million tonnes of DDG/DDGS and 225,000 tonnes of corn oil.

Daniel Sarmento, sales manager at Inpasa, highlights the fact that their DDG/DDGS has high levels of homogeneity and no sulphur contamination or phytic acid. “Our production control is monitored with the highest industrial standards, through an innovative automated process which assures a stable nutritional production quality, resulting in more phosphorus, amino acids and other essential nutrients availability.”

According to him, their steam drying process provides higher quality DDGS protein, conserving the nutritional value for the animals. “These features ensure a relevant outcome for the buyer aiming to reduce the costs of nutritional planning. Greater uniformity of soluble solids provides a higher density product that improves formulation costs and facilitates its handling/logistics,” he adds.

ALD

ALD Bionergia is the first corn ethanol plant in Brazil formed by rural producers. The company is a result of a partnership of 24 farmers in the region. Opened in 2021, their unit has an industrial park with 17,000 m² of built area to process 258,000 tonnes of corn annually. ALD Bioenergy aims to offer 80,000 tonnes of DDGS currently, initially for the domestic market.

“The use of DDGS in animal feed is new in Brazil, starting between 2010 and 2013. The good results, such as cost-benefit, easy digestion and accessibility in regions of corn producers, made this co-product increasingly popular,” evaluates Marco Orozimbo, CEO of ALD Bioenergia. Marco explains that ALD´s nutritional levels have a high concentration of minerals, yeast wall, energy and ethereal extract. “ALD Bioenergia’s industrial production is carried out through a press and steam drying process, at low temperatures.