Business & Policy
Higher ethanol co-product exports expected
By Delta Farm Press
Despite a weakened commodity price for corn, expectations are that exports of distiller's dried grains with solubles (DDGS) from the US will strenghten starting in January. According to the United States Grains Council, the increase will because of lower freight costs.
December 9, 2008
According to Dan Keefe, United States Grains Council manager of international operations for distiller’s dried grains with solubles, US DDGS exports are likely to recover in January, rebounding from a sluggish fourth quarter.
Freight costs had been the primary factor in causing a loss of export sales of US DDGS, a co-product of U.S. ethanol production.
“What we saw occur was bulk freight costs drop substantially relative to container freight costs,” said Keefe. “Container freight is usually the most common transport mode for DDGS and lower bulk freight costs made corn cheaper on a delivered basis, causing DDGS exports to suffer.
“However, we are starting to see bulk freight costs and container freight costs getting in line with one another, minimizing the price gap making exported products using containers more attractive.”
Keefe said the Council has endorsed the use of DDGS through feeding trials, educational and promotional efforts around the world, especially in the last five years as imports of US DDGS have doubled year after year.
Keefe said the Council’s recent International Distillers Grains Conference in Indianapolis, Ind., connected U.S. sellers and overseas buyers of the co-product.
Although direct sales from the 2008 conference will take several months to develop, several business relationships and negotiations have already begun including the connection of FoodChina Company with two US DDGS suppliers.
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