Q&A with Jack Daniel’s about the Feeder Cow Program phase out

Jack Daniel’s Distillery uses fermenters like the ones pictured to covert mash into alcohol. Each day that the distillery produces whiskey, they also produce around 500,000 gallons of a byproduct called spent distiller grains, which spoil quickly. Last week, the distillery announced that one of the programs they use to get rid of that byproduct, the Feeder Cow Program for local farmers, would be going away. (Photo Courtesy of Jack Daniel’s Distillery)

LYNCHBURG, Tenn. — Everyday they make it, they make it the best they can and every day they produce whiskey in the Holler here in Lynchburg, the Jack Daniel’s Distillery also produces around 500,000 gallons of spent distiller grains otherwise known as slop.

For almost as long as there’s been a distillery in Lynchburg, there’s been what’s become formally known as the Feeder Cow Program, in which local farmers haul off this byproduct to feed to area cattle. It’s a symbiotic relationship that’s worked for decades but it will be phased out over the next two years, according to a letter from General Manager Larry Combs to local farmers on May 19.

“As we have continued to increase capacity at the distillery to meet the world’s demand for our Tennessee Whiskey, we have had to look at alternate and environmentally sustainable options for the end use of these byproducts,” the letter states.

The letter went on to explain that the distillery planned to pivot away from “slop hauling” and instead partner with 3 Rivers Energy to build an anaerobic digester (AD) plant that would produce both natural gas and fertilizer.

To the 106 “slop haulers” in Moore and the surrounding counties, the announcement came as a bit of a gut punch. Within hours, social media buzzed with gossip, opinions, and questions about the move.

On Monday, we met with Jack Daniel’s official for a one-on-one with Jack Daniel’s General Manager Larry Combs in an effort to get as many of those questions answered as possible.

Here’s that interview:

Lynchburg Times: According to local agriculture officials, the slop program shut down previously sometime in the 1980s. Is that correct and can you give us a little background?

Larry Combs: Yes, that’s correct. It was two things that caused that shut down. One, production dropped significantly because demand for Tennessee whiskey dropped globally. At the same time that demand shifted, the distillery made their first investment in a dry house to produce distiller’s dried grains (DDGs) or dried cattle feed. Those DDGS still get produced today and are sold at the local Co-op and several surrounding Co-ops.

Q: How long has the phase out been an idea and did it originate locally or in Louisville?

A: It started here. Louisville trusts us to make those decisions. We’ve been working on it for the past four years.

Jack is growing. JD II up on the hill can actually expand five additional times. We needed a long term strategy that fit that growth. We’ll be at more than double capacity by 2024.

Currently, we run at peak capacity on about 122 fermenters a week. To this point, we’ve relied on local farmers to take away about 70 of those and we dry the remainder. But that’s seasonal. Over the past two and a half years, the farmer take away reduced by about 20 percent.

Combs says that according to staff who monitor the local agriculture trends, that reduction can be attributed to several factors like market conditions and some local farmers aging out of the industry without new farmers to replace them.

Q: According to your records, do you know how many slop hauler live and farm here in Moore County and how many come from other places?

A: I believe there are a total of 106 total slop haulers, including around 30 who work at the distillery. A little more than 50 of them are from Moore County and the others come from other areas.

With the farmers taking less away and a double in production with JD II, we had to have another answer. That could have been building another dry house, but dry houses are very energy intensive and not very sustainable.

Instead, we thought the better long term solution would be an anaerobic digester that produces biogas and fertilizer. It both supports the distillery growth, reduces our energy output, and allows us to support local farmers in a different way.

Q: Are there other deciding factors involved?

A: Yes, we’ve been under fairly significant pressure from the Tennessee Department of Environment and Conservation (TDEC) for a while now due to the slop hauling program’s effect on local water quality.

Our last meeting with them happened in 2019, prior to COVID, and the main topic of conversation then was how to minimize the impact of the cow feeder program. Their awareness of the issue is driven by complaints from inside this community about odor and runoff from local feedlots. The main reason many of the streams here in Moore County get on the state’s contaminated list is due to E. coli from manure on feed lots.

Q: So how will this phase out work?

A: One, we’re giving two years notice. It was never our intention to abandon anyone. We’ll be giving away slop to existing customers for the next two years as they make the transition.

Two, in the meantime, whatever money existing customers had been spending on slop, they can use that money to re-invest for the transition.  Again, we will provide the allocation of slop to existing customers at no charge for the next two years.  And when the full transition is made to dried cattle feed or DDGs, we will sell it to famers at significantly below market value.

Lastly, one of the other outputs for the anaerobic digester will be land applied fertilizer and 3 Rivers Energy has agreed to make that available to local farmers for free. We’re hoping that will increase hay yields, which will also ease the transition.

Combs says he’d also like it if the phase out and fertilizer option could lead to more local corn production.

“We currently buy around nine million bushels a year from Tennessee, Alabama, Kentucky, Illinois, and other states,” he said. “We source it from about a 200 mile radius. We’d happily buy 100 percent of locally produced corn and we’d buy all of it at an above market price.”

The goal is to take the grain from this season, turn it into whiskey, and then use the leftover stillage to produce natural gas and fertilizer. Then, we’d use that gas to power the whiskey making process, and the fertilizer to grow the grain. That’s the idea behind a sustainable and circular economy.

Q: Can you talk about how that natural gas will be used?

A: Sure, I think there’s been some confusion on that detail. The recently built natural gas pipeline in Moore County flows one way. It flows to Lynchburg. We created it with ATMOS Energy to support the distillery’s growth and to have a dedicated line into Lynchburg.

All the biogas produced by the AD plant will be used by the town of Lynchburg and the distillery. Regardless of what else happens around the world, we will always have a secure and renewable supply of natural gas moving forward. The citizens of Lynchburg will never have to worry about a shortage of natural gas ever again.

During very cold winters or other situations where the supply gets disrupted nationally, we won’t get curtailed. The AD plant can supply all the renewable natural gas that both the distillery and the town needs.

Q: We’ve heard some concerns about the potential location of the AD plant and the potential for it to produce foul smells. Can you address both of those?

A: The plant would be located just over the hill from JD II on land located off Good Branch Road. The estimated footprint would be 30 acres total to provide for land buffers and eventual growth but the initial plant would sit on an estimated five acre footprint.

As far as the smell is concern, this facility— the settling ponds, the digesters — will be 100 percent enclosed. The only time it would be open would be for infrequent maintenance. So the vast majority of the time, there should be little to no smell.

The difference in our proposed digester as compared to some of those that produce foul smells is what it’s being fed. This digester will only be fed our stillage. So even when it’s open, it will just smell like the distillery already does … that grain, farm type smell.

Most digesters do not have a single stream that can support it, so they end up being mixed media and using things like chicken waste. Jack Daniel’s is big enough to source it completely with 100 percent plant-based stillage.

We picked 3 Rivers Energy because they’ve done similar projects in other places using technology that’s got a track record.

Combs added that the AD Plant will be an $80 million local investment that will bring additional property tax dollars into Moore County as well as around 10 local jobs.

In conclusion, Combs says for the past four years, the local leadership team brainstormed to develop a win-win solution with the local farmers – including those who work at the distillery – and the town foremost on their minds.

“How do we support Jack’s growth and do it as sustainability as possible? Can we optimize revenue to pay for all these investments? And how do we help the farmers and community and do what’s right? Those were the questions we asked ourselves along the way,” Combs says.

“We wanted a win-win solution that allowed us to grow and one that kept everyone as whole as possible. How that solution would affect the town and the farmers was always on our minds throughout that process. We think we’ve come up with a plan that accomplishes that.”

If you want to learn more about that plan or have questions or concerns about the Feeder Cow Program phase out, there will be a public Q&A on Thursday, May 26 at 4:30 p.m. in the Jack Daniel’s ERC Gymnasium located at 1611 Fayetteville Highway. •

{The Lynchburg Times is the only locally-owned newspaper in Lynchburg and also the only woman-owned newspaper in Tennessee. We cover Metro Moore County government, Jack Daniel’s Distillery, Nearest Green Distillery, Tims Ford State Park, Motlow State Community College, Moore County High School, Moore County Middle School, Lynchburg Elementary, Raider Sports, plus regional and state news.}