USGC efforts keep U.S. DDGS exports steady

30.05.2017

Attractive prices, available supply and market development efforts by the U.S. Grains Council (USGC) have contributed to a steady flow of U.S. distiller’s dried grains with solubles (DDGS) to the export market, according to the USGC.

The United States exported 6.9 million tonnes of DDGS between September 2016 and March 2017, up 6% from the prior year-over-year period, according to data from the U.S. Department of Agriculture. The increase occurred despite a sharp drop in purchases from China, which has been the largest buyer the past few marketing years.

According to the USGC, the Chinese government began enforcing anti-dumping and countervailing duties on U.S. DDGS in January, which led to a 69% decline in exports to the country compared with 1.9 million tonnes in 2015-16.

“While this void had an enormous impact on the DDGS market and U.S. DDGS producers, it left ample supply for other world buyers to purchase at prices below corn,” the USGC said. “While this trend is not uncommon historically, the spread between the two is now the longest it has been in the last five years.”

The USGC said it has implemented programs throughout the world geared toward helping end-users find ways to best incorporate U.S. DDGS into their rations.

While China has led the way in imports of U.S. DDGS, Mexico was the second largest market in 2015-16, purchasing 16% of all U.S. exports. So far in 2016-17, Mexico has increased its imports of U.S. DDGS by 12% year-over-year to 12 million tonnes.

“DDGS-focused work (in Mexico) has focused on educating buyers, increasing purchases by existing customers and promoting an expansion of sales into new markets like in the southeast of the country through dairy and livestock feeding trials,” the USGC said.

The USGC also has found ways to help ramp up purchases of DDGS in South Korea. The USGC held a DDGS promotion conference in the country recently, an effort that has helped push purchases by South Korea up 137,000 tonnes year-over-year to more than 615,000 tonnes, the USGC said.

The USGC said other markets have their eye on U.S. DDGS as well. In May, Saudi Arabian buyers made several large purchases, while notable increases also have occurred in Turkey, Thailand, New Zealand, Egypt and Peru.

The USDA has forecast U.S. DDGS exports for the full 2016-17 marketing year to reach 10.4 million tonnes, above the five-year average of 10.2 million tonnes.

“If the aggressive purchases of world buyers continue throughout the second half of the marketing year, the final numbers could exceed this prediction,” the USGC said.


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