Canadian cattle producers wonder why they can’t obtain corn-based ethanol byproduct if the United States is supposedly overflowing with the stuff.
The U.S. Grains Council says it is trying to expand exports of distiller’s dried grains with solubles, or DDGS, to Canada in an effort to find a new home for a surplus feed ingredient.
Yet farmers like Norville Keefer, who feeds 150 calves on his operation near Rossburn, Man., has tried buying the product from the United States to no avail.
“We undertook to get some ethanol grain out of the U.S. and that’s a total impossibility,” he said.
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Keefer and his neighbour are searching for a way to offset the rising price of coarse grains.
“We’re looking for a cheaper product, trying to make a dollar on these darn cattle.”
He recently contacted two plants in North Dakota and a feed broker in Minnesota looking for enough distillers grain to fill one super-B truck.
“There isn’t a chance of getting a bushel out of there,” said Keefer.
But one of the largest marketers of DDGS in the U.S. says that is a temporary imbalance that should be rectified early in the new year.
Sean Broderick, merchandiser for Commodity Specialists Co., a firm based out of Minneapolis, Minn., had ample supplies of DDGS this summer but that quickly changed when high corn prices prompted the U.S. livestock industry to start chasing alternative feed ingredients.
Cattle and dairy farmers were waiting for corn prices to hit their post-harvest lows in October but that never happened. Prices kept rising and Broderick’s phone started ringing with people eager for DDGS.
“At some point in time you don’t have any more to sell,” said Broderick.
His company usually spreads its annual two million tonnes of DDGS sales throughout the year, but it was surprisingly snapped up this fall.
“To not be able to sell more in this high priced market is kind of painful and you second guess yourself,” said Broderick.
But he has good news for Canadian cattle producers like Keefer.
Two new plants are coming on line in Richardson and Underwood, North Dakota. Each will produce about 300 tonnes of the byproduct per day and both are well situated to service the western Canadian market.
“If there is somebody out there looking for a truck here, a truck there, we’ll have it by the end of January,” said Broderick, adding that he should be able to fill trainloads by March.
And more supply is coming.
It won’t be long before the 109 ethanol plants now operating in the U.S. and the 57 under construction will be producing more byproduct than can be consumed domestically.
Economists project those plants will produce 15-30 million tonnes of DDGS by 2010, up from about 10 million tonnes in 2006. That will be enough to satisfy domestic needs with plenty left for export.
Canada is already the top customer for U.S. DDGS, importing more than 105,000 tonnes in 2005. The U.S. Grains Council hopes to expand exports to 167,000 tonnes by 2011.
This is welcome news for Keefer, who wants to secure a reliable supply. Between him and his neighbour they can use about 25-30 tonnes per month.
“We don’t want to start feeding this stuff until we have a ready supply of it. We don’t want to switch back and forth,” he said.
In the meantime, he plans to source some corn-based DDGS from a whisky distillery in Gimli, Man.
