November 26, 2007

 

Energy crisis creates new opportunities for feed industry - Alltech

 

press release

 

 

The worldwide energy crisis being driven by increasing competition for grain is not all bad news, according to Dr Pearse Lyons, president of Alltech. This was the key message delivered during Alltech's 21st Asia-Pacific lecture tour.

 

Dr. Pearse Lyons, president of Alltech is respected around the world for his pioneering work researching and developing natural ways to boost animal production through better nutrition, including fermentation processes that harness yeasts to release more energy in livestock feeds.

 

As the keynote speaker during the Tour, Lyons explored the enormous challenges facing the feed and livestock industries, under the theme, "The New Energy Crisis: Food, Feed or Fuel?" The tour took a group of leading scientists, feed industry and bio-fuel experts to 16 countries, 33 cities in just 20 days and was attended by farm advisers, veterinarians, livestock nutritionist specialists, researchers and feed company representatives from across Asia-Pacific.

 

Dr. Lyons said the energy crisis was of increasing concern for the future of livestock industries, with no end in sight to increasing demand for ethanol production and livestock-based food products such as meat and dairy foods.

 

He said feed industry leaders from 12 countries, pulled together recently by Alltech for a special forum to explore the issues, told him both the price and availability of raw materials would continue to be a challenge.

 

The companies represented 15 percent of total feed production in the world, and produced between them some 90 million tonnes of feed per year. These companies couldn't find enough grain and were being forced to use by-products, often from unknown origins. At the same time livestock producers were finding it difficult to pass on increasing production costs and stay profitable.

 

He said corn prices were the highest ever and stocks were the lowest. Governments in Russia, China, Egypt, Jordan and Morocco were taking action to "freeze" domestic food prices because of protests from consumers. In Italy there had been a pasta boycott in protest over increasing prices.

 

"These issues are not going to go away," he said.

 

"The world requires 99 million barrels of oil per day. Calculations show we only have enough oil for another 32 years, enough natural gas for another 64 years and enough coal for another 155 years. Seven countries own 65 percent of those reserves and they are mostly in areas that are politically unstable.

 

"Oil prices are reaching US$100 a barrel and that affects us because of the pressure it puts on demand for alternative fuels and more grain to produce more ethanol. And that¡¯s only part of the picture," he said.

 

"The situation is being compounded by an increase in the prosperity of countries like China and India. The wealthier people become the more meat they eat so we will need to produce more livestock, and that means we will need more feed.

 

"By the year 2050, we will be producing 465 million tonnes of meat and that will require 2082 million tonnes of feed, almost twice as much as we used in the year 2000.

 

"That is a major problem, especially when you consider grain-rich countries are now using their grains for automotive fuels. The US government has set a target of 35 billion gallons of ethanol by the year 2017 - equivalent to all of this year's record corn harvest in the US. That is going to lead to an even greater shortage of grains.''

 

But this would also lead to a surplus of fibre, or cellulose, left over from grain and ethanol production, which offered enormous opportunities to develop a major additional source of income for farmers and new sources of livestock feed.

 

Dr. Lyons challenged research institutes, governments and rural industries to invest in renewable energy, identifying ways to release energy from cellulose, and alternative raw materials to food crops to make bio-fuels.

 

As part of its commitment to research, Alltech has invested US$20 million in a new nutrigenomics research facility in Kentucky, USA. The centre will explore ways to boost livestock health, productivity, longevity and fertility by feeding an animal to express its full genetic potential.

 

"We are surrounded by opportunities but great opportunities need research," he said.

 

The company had received US support to build a community-based bio-refinery in Kentucky, to process cellulose into ethanol and other value-added products.

 

"This plant goes beyond a typical ethanol facility by utilizing Alltech's existing expertise in the area of Solid State Fermentation," Dr. Lyons said. "It will enable us to take fibre left over from corn after producing ethanol and convert it into a usable product".

 

"The facility will also have the capability to produce algae, which can theoretically produce 5,000 gallons of biofuel per acre per year, compared with 400 gallons per acre of corn."

 

The tour commenced in Auckland, New Zealand on 29th October and finished in Dubai on 17th November.