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Feasibility of a Cattle Feedlot/Large Dairy Co-located with the Blue Flint Ethanol Plant


Blue Flint Ethanol near Falkirk, ND
Cattle facility

Greg Lardy, Scott Pryor, Eric DeVuyst, Ron Wiederholt, Wally Eide, J. W. Shroeder

Research Statement/Motivation

This study looked at the economic and technical feasibility of co-locating a dairy or beef cattle facility with Blue Flint Ethanol near Falkirk, ND.  Blue Flint Ethanol produces approximately 50 MGY of ethanol and 150,000 dry tons of DDGS per year.  The DDGS are dried and shipped by rail to be used as animal feed throughout the country.  Co-location of a dairy or cattle feedlot on site would have multiple potential benefits.  On-site use would allow for utilization without drying or long transportation.  Markets would be ensured for both the ethanol plant and the animal feeding operation.  Cattle manure could be processed in an anaerobic digester to produce biogas that could be used for electricity production or thermal energy at the feedlot or ethanol plant.  The facility would then help Great River Energy to meet Minnesota's renewable energy mandate.

Research Methods

We developed a spreadsheet model of an anaerobic digestion system to predict reactor sizes and biogas production based on herd size and supplementary substrates from the ethanol plant.  These results were integrated into an economic model to determine overall feasibility. As the business plan is developed, it would be possible to operate the feedlot and digester facility as separate businesses requiring some economic exchange for manure. However, they are distinctly intertwined. The dairy/cattle facility was developed specifically for collection of manure to feed the digester while the digester requires manure in order to produce biogas. The digestate solids were valued strictly for the amount of N, P, and K they contain. There may be other components of value (in addition to the nutrients) in the digestate when used as a soil amendment, but very little data are available to quantify what that value is.

Major Results and Conclusions

Based on the valuation assumptions for items including energy, milk, feed, construction materials, etc, the dairy project was determined not to be economically feasible. The high capital construction costs coupled with the uncertainty of feed and milk prices make it prohibitive. Other items such high milk hauling and marketing costs contribute to the economic strains on the project. In addition, the lack of a large scale milk processing company within a reasonable distance of the proposed dairy is a concern. The integration of an existing ethanol facility with a cattle feedlot and an anaerobic digestion facility may be technically feasible, provided the cattle feedlot facility is designed to facilitate collection of manure which is largely free from soil contamination (e.g. a confinement facility built with slatted floors). Economic feasibility of this system is heavily dependent on construction costs for such a facility and financing details.  The project may be feasible assuming 40 percent equity and 7.5% interest rate while it is not projected to be profitable assuming 20 percent equity and 9.5% interest rate.

Graph: potential gas revenue from a 20,000 head cattle feedlot with supplementary feed

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Published by the Department of Agricultural and Biosystems Engineering

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Last Updated: Wednesday, July 02, 2014 9:29:12 AM