The invention provides a method and system of processing a starchy material that can advantageously produce ethanol, sugar syrup, or starch as the chief products along with food-grade co-products such as, but not limited to oil, protein, fiber, and gluten meal. The invention can apply such a force to a starchy material that is at a superambient temperature with a high shear processor to mill, mix, and gelatinize some of the starch. A liquefaction enzyme can be introduced into the high shear processor to liquefy the processed product. The moisture content of the processed starchy material can be reduced, which preferably occurs in the high shear processor. Some of the co-products such as the oil, protein, fiber and gluten meal can be separated prior to the sugar syrup purification or ethanol fermentation steps.