Economic Research on Ethanol Feed-Use Coproducts : A Review, Synthesis, and Path Forward

During the domestic ethanol boom of the mid-2000s to early 2010s, ethanol coproducts grew to play a crucial role in both ethanol plant profitability and livestock feeding rations. Coproducts from ethanol production have risen from providing a single additional revenue stream to diversified value-added product offerings to increase revenue and thus maintain profit margins. The objective of this paper is to provide a comprehensive review of the economic research on feed-use ethanol coproducts. Existing research finds that traditional feed use ethanol coproducts, consisting largely of distillers’ grains products, positively contribute to the livestock feeding industry, especially in their ability to offset the impacts on the grain markets brought on by increased ethanol production. However, much of the research covered appeared during the ethanol boom of the first decade of the 2000s. The market has continued to evolve introducing de-oiled products, corn oil, and high protein distillers has left many current economic questions in the distillers’ grains industry unexplored. Very little work has been conducted on non-feed-use products. The physical market has moved well beyond the current academic understanding of market products and structure. Based on this, we provide suggestions for future economic research for value-added distiller grains, government regulation, and different commodities and locations