UK biofuels expansion may threaten rapeseed meal 

Rapeseed meal's position in animal feed rations in Britain looks under threat as bioethanol refineries enter commercial production.

Ensus is due to ramp up its biorefinery in northeast England during the first quarter of this year. It will take about 1.1 million tonnes of wheat and produce bioethanol and around 350,000 tonnes of a high protein animal feed.

The feed, known either as wheat distillers or DDGS (distillers dried grains and solubles), should have a protein level of about 34%, far higher than the around 11% of the feed wheat input and comparable to rapeseed meal.

It is going to be fascinating to see the battle between wheat distillers and rapeseed meal in the market, Hugh Burton, raw material manager for pig and poultry feed compounder ABN said. ABN is a unit of Associated British Foods Plc.

"We are expecting quite a lot of DDGS supplies coming on stream potentially from bioethanol production in the UK and also from imported supplies," Michael Archer, senior economist at the Home-Grown Cereals Authority (HGCA) said.

ABN's Burton said Vivergo was expected to bring on line a second similar size bioethanol plant in eastern England which would also produce DDGS either in late 2010 or early 2011.

Burton said DDGS was relatively low in key amino acid lysine which is important for both pigs and poultry.

"I'm sure it will knock rapeseed meal out of the ration in the cattle sector but where lysine is more important in pig and poultry feed it doesn't seem to be having that effect with the price mix of ingredients we have at the moment," Burton said.