Alltech Raises Alarm over Corn Supply

National meetings highlight new technology the company is bringing to the table.

Published on: Jan 19, 2007

To Pearse Lyons, president of Alltech, the sky is indeed falling on American grain production. Unless new technology is developed and adopted the victims will be the nation's livestock producers, he says. With 90% of Alltech's sales coming from animal feed sector there's little wonder for his concern.

Lyons was the key speaker at a stop on Alltech's North American Lecture Tour 2007 at Ohio State University Jan. 18. The tour is titled "Industry in Crisis; The greatest dilemma that the agriculture industry has faced in the last 50 years." The Ohio stop was the 18th in the 20 city tour which visits 18 states and two Canadian provinces.

"Our dilemma is are we going to produce food or are we going to produce fuel?" Lyons asks. He cites the "grain devouring biofuels industry ," as the source of skyrocketing corn prices and shrinking stocks of grains. The fallout has been a budget crunch for livestock producers. In the past four decades, the percentage of corn used for animal feed has dropped from 80% to 50%, and ethanol production has increased by 250% in just the last two years. Additionally, an increase of 100% is expected within the next two to three years.

"Corn prices have gone from $2 a bushel for the last several years to $3.75 a bushel and supplies are well below the normal levels," Lyons says. With a goal of 7.5 billion gallons of ethanol production by 2012, the biofuels industry will need about one third or 75 million tons of the nation's annual production of around 250 million tons of corn. Some proposals call for ethanol production to double to 15 billion gallons by 2015 which would require 150 million tons of corn, Lyons says.

Part of the solution is to better put to work the 40 million tons of dry distillers grains and solubles that are by-products of the ethanol production process. "We need to look at DDGS as the main product and ethanol as a co-product," he told a gathering of about 50 industry leaders and students at OSU's Blackwell Hotel. To be more valuable DDGS need to become more consistent. They must be free of mycotoxins and antibiotic residues. Phosporous, sodium, sulfur levels need to be measured and standardized.

As a former brewer himself, Lyons has positioned Alltech to provide the technology that can enhance animal gains. Products like Yea-Sacc 1026 use micro-organisms to improve animal gains. The company also promoted Sel-Plex as a way to deliver usable selenium to cattle.

Alltech employs 2100 people at 14 production facilities around the world. It is headquartered in Lexington, Ky.