The old maxim of “location, location, location” not only holds true in real estate, it’s become a factor when considering whether distillers grain (DG) can help you cut winter feed bills.

While ethanol’s effect on the cattle industry continues to be a matter of debate, cattlemen who grow corn and live close to an ethanol plant are finding they can have the best of both worlds, says Gregg Carlson, a South Dakota State University agronomist. All it takes is looking at what once was considered low-value crop residue in a different light.

In the past, some producers considered corn stover – the stalks and leaves left behind after the grain is harvested – to have limited value, Carlson says. The stalk fields may have been grazed, or the stalks baled and used as bedding.

However, by baling the stalks, then combining the stover and DG in a grinder-mixer, Midwest producers who have a diversified corn-cattle operation have significantly lowered their winter feed bills and increased profitability.

A cattle-corn-ethanol system has become common in the Midwest, where producers have long grown corn and raised cattle in a diversified operation. With the recent advent of ethanol, and its associated DG byproduct, producers located near ethanol plants quickly learned they could profit from the increased price of corn as well as benefit from feeding the DG byproduct.

Just how profitable? In a paper looking at the profitability of a cattle-corn-ethanol production system, Carlson and others at SDSU looked at backgrounding calves with a ration of 33% corn stover, 22% hay, 15% shelled corn, 30% DG and an ionophore. This system produced an estimated crop-livestock profit of $278/acre. A non-integrated corn farm selling its harvest for ethanol production and plowing down all the stover returned $139/acre in estimated profit. Economics related to competition between ethanol and cattle feeding for corn as a resource were not considered in the calculations, Carlson says.

While the above calculation looked at dried DG plus solubles in the ration, Carlson says wet DG seems to work better when mixed with stalks in a grinder-mixer. Combining stalks and DG works because DG is around 30% protein and can be purchased for 75% to 90% of the price of corn. Corn stalks are an inexpensive source of fodder high in total digestible nutrients but low in protein, so combining the two in a mixed ration provides a low-cost winter feed.

In his budgets, Carlson values stalks at the cost of harvesting. He recommends that no more than 60% of the stalks be harvested. This leaves enough organic matter behind to maintain soil organic carbon levels, which is important in long-term sustainability.

His budgets also call for the manure to be returned to the field. “If you return the manure from an acre’s worth of corn stalks with the DG along with it, you could be putting $30-$60 worth of nitrogen, potassium and phosphorus back on the field, over and above what you took off in the corn stalks.”

Carlson says that for a cattle producer who doesn’t grow corn or some other form of low-cost fodder that can be mixed with DG, such as wheat or oat straw, and doesn’t have a nearby source of DG, the economics aren’t quite as favorable. But for many Corn Belt producers, a cattle-corn-ethanol production system has helped lower feed costs and improve profits.