MOOSE JAW, Sask. – Asian livestock could soon be getting their meals from Saskatchewan.
Terra Grain Fuels of Belle Plaine is looking at shipping dried distillers grain to offshore customers.
Dale Williamson, manager of supply and logistics for the company, told farmers at a market outlook conference hosted by the Canadian Wheat Board that the company is also considering new markets for its ethanol.
Terra Grain Fuels operates a 150 million litre ethanol plant, which produces about 150,000 tonnes of DDG from 390,000 tonnes of raw wheat.
Read Also
Research looks to control flea beetles with RNAi
A Vancouver agri-tech company wants to give canola growers another weapon in the never-ending battle against flea beetles.
Sixty percent of its DDG production goes to the United States, primarily the Pacific Northwest. The remainder is used in the local feed market.
Turkey has recently emerged as a potential new market, Williamson told the meeting, although no deals have been signed.
“The country has made a ruling about no (genetically modified) product coming into the country.”
He said Turkish producers had been feeding U.S. corn DDG to their livestock , but the new ruling makes DDG from non-GM wheat more attractive. Most U.S. corn has been genetically modified.
“We have interest from China and Japan as well,” Williamson said.
The company shipped a few containers to Japan for trial last fall, and potential buyers are visiting Saskatchewan this week.
DDG typically competes with canola meal in the feed market. When canola crushers were unable to sell to the United States because of salmonella contamination, he said, Terra Grain Fuels moved DDG into those markets.
Canola meal supply from new crushers, including LDM Foods at Yorkton, Sask., is affecting DDG prices and available markets. Prices have dropped $25 to $30 per tonne over the last six weeks from the typical $150.
Terra Grain Fuels is still contracting wheat for the 2010 crop year. Its production contract offers $4.10 per bushel delivered to Belle Plaine this fall.
Spot prices have been $3.55 to $4 a bu.
The company does business with more than 400 producers, taking about nine percent of contracted volume each month.
It buys a variety of wheat types, including soft white, prairie spring and red winter and lower grades of durum. Fusarium content is limited to one percent to be able to sell the feed byproduct.
Most of the plant’s ethanol production is used in Saskatchewan and British Columbia. Saskatchewan mandated ethanol-blended fuel several years ago and B.C. came on stream in January.
Saskatchewan fuel contains eight percent ethanol and B.C.’s contains five percent.
Alberta will implement a five percent mandate in July.
Williamson said the company had been selling ethanol to Ontario, but it is more economical to ship to the western provinces.
“It costs four to five cents a litre to get it to Ontario,” he said.
Ethanol on the Chicago Board of Trade is trading at about $1.70 per U.S. gallon.
Terra has leased 82 fuel rail cars and has 100 cars to ship the DDG.
Meanwhile, work is underway at the plant to help it run at full capacity.
“We are upgrading the grain milling system to accommodate a 25 percent increase in what we process,” Williamson said.
The work is expected to be complete by mid-April.
