USDA Report: More Ethanol, More DDGS

The United States is more than able to continue supplying global customers with necessary feed ingredients, according to the U.S Grains Council (USGC), the leading organization for export market development for barley, corn, sorghum, and co-products.

Citing the March 11 release of USDA’s World Agricultural Supply and Demand Estimates (WASDE), USGC Vice Chairman and Ohio corn producer Rick Fruth says U.S. corn ending stocks for 2008/2009 are projected 50 million bushels lower this month as ethanol use is estimated 100 million bushels higher.

“This is good news for U.S. corn growers and the U.S. ethanol industry, which was stumbling as a result of the current economic situation,” says Fruth. “The ethanol industry is extremely important for the sustainability of rural America.”

Although U.S. corn exports are projected 50 million bushels lower, Fruth says the 100 million bushel increase for corn used for fuel will result in approximately 1.7 billion pounds of distiller’s dried grains with solubles (DDGS) for global livestock and poultry industries. One bushel (56 pounds) of corn used in the dry mill ethanol process yields about 17 pounds of DDGS plus 2.8 gallons of ethanol. Specifically, 1 gallon of ethanol equals about 7 pounds of DDGS. The Council, which has been developing overseas markets for DDGS since 2002, reports DDGS exports increased more than 91 percent in 2008 from the previous year. In 2008, total DDGS exports amounted to 4.5 million tons compared to 2.3 million tons in 2007.

“Given USDA’s report citing increased supplies of wheat and corn available in the global marketplace, DDGS exports will allow U.S. farmers to remain competitive in markets overseas,” says Fruth. “The distiller’s grains are a way to help U.S. growers get every bit of value out of the kernel of corn, and they help reassure our international buyers that a good source of feed continues to be available for our livestock producers in the United States and abroad.”

According to Scott Richman, senior vice president for Informa Economics, 26 million tons of U.S. DDGS were produced in 2008 and 29 million tons, possibly 30 million tons, will be generated this year. This is representative of a 10 percent growth in DDGS output each year. Richman says the increase is making exports of DDGS “more and more” important for the U.S ethanol industry and corn growers.

(Source: United States Grains Council)

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