The United States is overflowing with distiller’s dried grains with solubles and Americans are looking north for a home for the ethanol byproduct.
“Canada is the largest single market for U.S. DDGS, importing more than 105,000 tonnes of the product last year,” said Adel Yusupov, the U.S. Grain Council’s manager of international operations for Asia.
Armed with the results of a new feeding trial, the council hopes to expand exports to 167,000 tonnes by 2011.
The product is moving into Canada by rail and truck, where it is being consumed by beef cattle. But the council said it has proof the “dirt cheap” feed ingredient will work just as well in swine diets.
Read Also
USDA’s August corn yield estimates are bearish
The yield estimates for wheat and soybeans were neutral to bullish, but these were largely a sideshow when compared with corn.
A 53-day experiment conducted by Gowans Feed Consulting, where 1,008 Canadian pigs were fed increasing levels of corn DDGS, showed distiller’s grains can make up to 25 percent of swine diets without compromising growth or economics.
If the same results can be achieved in the real world, it would be welcome news for the hog sector, which is concerned that Canada’s wheat-based ethanol plants will drive up the costs of one of their main feed ingredients. Finding a cheap alternative would help offset the rising cost of feed wheat.
The council hopes the feeding trial will foster greater uptake of corn DDGS in Canada because it will soon be entering a serious oversupply situation in the U.S.
“The National Corn Growers (Association) estimates if we can’t find export markets for them, we’ll be swimming in the distiller’s grains in the next five to 10 years,” said Yusupov.
The 107 ethanol biorefineries operating in the U.S. produced 7.8 million tonnes of the ethanol byproduct in 2005.
That volume will increase to 30 million tonnes by 2010 as new plants come on line and old ones expand production, according to Commodity Specialists Co., a Minneapolis, Minn., agricultural commodity analysis firm.
About 14 percent of U.S. DDGS are now exported. Commodity Specialists Company estimates exports will reach 1.26 million tonnes in 2006. The product is being shipped to 33 countries including many Asian nations.
Shipping DDGS halfway around the world seems illogical given that some industry analysts say the only way for DDGS to be consumed economically is by feedlots attached to the ethanol facilities.
Yusupov said exporters are able to take advantage of what would otherwise be empty container cars heading back to China’s booming economy, which makes it feasible to provide the ingredient to markets in Asia.
But it makes more sense to ship as much of the product as possible into Canada, which is relatively close to many of the main ethanol producing states like South Dakota, Minnesota, Iowa and Illinois.
Canada’s livestock industry is similar to that in the U.S., where millions of tonnes of corn DDGS are already consumed annually. That makes the product an easier sell than it would be in distant countries with unfamiliar feeding practices.
“That’s why we decided to look at Canada as one of the key markets for us,” said Yusupov.
He realizes U.S. exporters will soon face stiff competition from the wheat DDGS being produced by Canada’s new ethanol plants.
That is another reason they conducted the swine feeding trials. Wheat DDGS cannot be incorporated into hog diets as readily as corn DDGS due to a problem with stomach burn, said Yusupov.
“Corn distillers look like one of the best protein supplements for swine,” he said.
