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From the Dregs, Export Success

Category: Exports, Markets, Trade Data

Biofuel byproduct goes to market as a livestock feed

Blogging about the first the U.S. Agribusiness Trade and Investment Mission to Peru and Ecuador earlier this month, Michael Scuse of the U.S. Department of Agriculture tells of visiting a Peruvian feed mill and dairy farm where “I saw the first U.S. shipment to Peru of distillers dried grain with solubles” – or DDGS, the livestock feed co-product generated by dry mill corn-based ethanol plants.

While the food versus fuel debate over corn ethanol continues, the dregs of the distillation process used to make the biofuel are a clear winner for the U.S. in the global marketplace.

The USDA counts DDGS among its top export success stories, reporting that over 30% of the 13.1 billion bushel 2009/10 corn crop went into ethanol production; 18% of the DDGS produced were exported. U.S. exports of DDGS have grown from 787,000 MT in CY 2004 to 5.64 MMT in CY 2009 – to the extent that they are now considered critical to U.S. corn growers’ profitability.

The leading customer for U.S. DDGS is China, taking in about 40% of exports last year. And the U.S. has become, very rapidly, China’s primary source for DDGS [see the table below] – prompting China to announce an antidumping investigation into its U.S. DDGS imports at year-end 2010. The U.S. Grains Council reports helping almost 70 U.S. companies to register as interested parties to the investigation. According to the USGC, provisional tariffs on DDGS could begin as early as June 2011. China’s decision on its findings is due December 28, 2011, though that deadline can be extended by six months. 

Date posted: February 11, 2011

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