DDGS gains ground as low cost feed option

Posted 9 November 09

Demand for distillers’ grains with solubles (DDGS) will continue to grow as livestock producers turn to the feed as a cheaper alternative to maize, Reuters reports.

The average price for distiller’s grain last week in Iowa was $116.25 per ton, compared with $126.25 a year ago, USDA said.

And with the ethanol industry gearing up for a better year in 2010, more distiller’s grain should be making its way into the US livestock sector.

The US Department of Agriculture forecast ethanol production to rise by 13.5% in the 2009 crop year that began September 1, while maize prices could continue to rise as fuel blenders compete for a larger share of a likely record US crop.

Meanwhile, US DDGS production is expected to increase this crop year to 28-30 mln tonnes, up from about 24-25 mln tonnes in the 2008/09 crop year.

Domestic demand for distiller’s grain is growing as US cattle and hog producers look to cut feed costs by boosting the amount of DDGS in feed formulations.

Overseas demand is also on the rise, with exports expected to increase to 6 mln tonnes from 5 mln tonnes this crop year, according to Dan Keefe, manager of international operations for DDGS at the U.S. Grains Council.

“DDGS has protein, fat and fiber, and it’s a good substitute for soy protein, canola protein, fish-meal, even bone-meal,” Keefe said. Distiller’s grain exports may continue to increase in the coming years as more importing countries learn of its benefits, he added.

Source: F.O. Licht’s World Ethanol & Biofuels Report

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