Distillers Grains Exports
Besides the ongoing China dumping investigation, it appears that today's higher cost of the distillers grains product is slowing down its export sales. This is not unlike our lowered corn exports, of late, due to higher corn prices due to our U.S. ethanol policy and global production competition.
Case-in-point taking the long term view, according to Agrimoney, China has a strong chance of working towards corn self-sufficiency through future efficiency gains. This would echo my article here. Contrary to many of the Ag bulls, all is not guaranteed when it comes to future Ag commodity demand and that has implications for the future of the DDGS export market.
Also, pork producers are finding that the meat resulting from DDGS fed to pigs results in poor quality meat and bacon. They will be cutting back on its use.
See 1-year graph of Iowa DDG prices below.
[According to my calculations, a ton of corn now costs approximately $271. ($299 per tonne.) A ton of DDGS costs approximately $220. "Wet distiller's grain with solubles" or WDGS costs $75 per ton. . . source: Drovers]
- DDGS exports increased 100% from 2008 to 2009.
- DDGS exports increased 60% from 2009 to 2010.
- More than 25% of total U.S. distillers grains production, totaling 9 million tonnes, was exported in 2010.
- In 2010, China was the largest buyer with 2.5 million tonnes, or 28% of the total. But, in January, China started an anti-dumping investigation on U.S. DDGS, which halted imports.
- Mexico, Canada, South Korea, and Vietnam were the remaining top importers in 2010.
- More than 50 countries imported U.S. distillers grains in 2010, up from less than 20 countries just a decade ago.
- The amount of feed produced by the ethanol industry in 2009/10 was more than the total amount of grain consumed by all of the beef cattle in U.S. feedlots.
- DDGS exports were down 2% in March 2011 from March 2010 levels.
Besides the ongoing China dumping investigation, it appears that today's higher cost of the distillers grains product is slowing down its export sales. This is not unlike our lowered corn exports, of late, due to higher corn prices due to our U.S. ethanol policy and global production competition.
Case-in-point taking the long term view, according to Agrimoney, China has a strong chance of working towards corn self-sufficiency through future efficiency gains. This would echo my article here. Contrary to many of the Ag bulls, all is not guaranteed when it comes to future Ag commodity demand and that has implications for the future of the DDGS export market.
Also, pork producers are finding that the meat resulting from DDGS fed to pigs results in poor quality meat and bacon. They will be cutting back on its use.
See 1-year graph of Iowa DDG prices below.
[According to my calculations, a ton of corn now costs approximately $271. ($299 per tonne.) A ton of DDGS costs approximately $220. "Wet distiller's grain with solubles" or WDGS costs $75 per ton. . . source: Drovers]