Canada imported a record amount of dried distillers grain last year, but high prices have halted trade.
“There is virtually nobody buying any dried distillers,” said Jay Burrows, commodity trading manager at Western Feedlots.
“The people that are still feeding it are just burning off through their stockpiles.”
Western Feedlots feeds 160,000 head of cattle annually at its three southern Alberta locations and uses 10 million bushels of barley a year.
The company added 20 percent DDGs to its rations when it was economical to do so, but Canadian contracts were not filled and the price increased when China bumped up its imports from 450,000 tonnes to nearly three million by the end of last year.
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“The Chinese bought up everything they could find to the point in Western Canada you couldn’t buy dried distillers corn. It just wasn’t there,” Burrows said at the recent Western Barley Growers Association convention in Calgary.
DDGs had been priced at $230 per tonne, which is $25 more than barley, but the recent price increase created a $50 spread.
Corn is the main feed grain in the United States and DDGs are still cheaper.
As a result, they remain a bigger part of beef and dairy cattle rations in that country.
Distillers grain has a futures contract, but there is no interest in it, said Burrows.
There are only a few DDG producers in Western Canada and they export most of their production, mostly to California, he added.
Canada imported 1.02 million tonnes from the United States last year compared to 820,000 tonnes in 2009, according to U.S. Grains Council statistics.
Other customers include China at three million tonnes, Mexico at 1.6 million tonnes and Vietnam at one million tonnes.
U.S. ethanol plants produced 33 million tonnes and exported eight million tonnes.
However, trade to China halted when the country launched an antidumping investigation on U.S. DDGs in January.
Burrows said Western Feedlots used DDGs as a cheaper source of energy because tallow was worth $1,000 per tonne.
“We have a product that is not necessarily displacing grain; it is a fat carrier. It has some positive performance parameters around it.”
DDGs are also a good source of crude protein: wheat DDGs are nearly 40 percent compared to the corn byproduct at 28.2 percent.
Crude fibre in wheat DDGs is 7.2 percent while corn provides 6.4 percent.
DDGs offer a softer, more digestible fibre and its sweet smell and taste makes it highly palatable.
However, DDGs have a higher level of phosphorus and nitrogen than traditional feed, which end up in manure.
There is also a greater potential for the presence of grain mycotoxins, which are concentrated in the ethanol making process.
Shrink losses may also be higher, Burrows said, and outside stockpiles blow everywhere during southern Alberta chinook winds.
