End users like dairy and livestock producers are finding new appeal in dried distillers grains as prices of soymeal are rising, according to an article by Agrimoney (http://bit.ly/…).
The recent soymeal record prices are due largely to strong demand from both domestic and export markets that seek the high-protein feed ingredient. Also factoring in the equation is that world soybean supplies have been hit by drought-affected harvests last year in the U.S. and South America.
However, those high prices could send livestock producers, seeking for the least cost rations, back into the DDG market for better deals.
The price of soymeal continued to climb, reaching $520.80 per ton on Tuesday, pushing the value of DDG relative to soymeal to about 44%, presenting a definite value for end users.
When DDG hit record highs during August 2012, it priced itself out of some rations when its value relative to corn soared above 100% where it remained, other than occasional drifts downward, until three weeks ago, reaching 92% on Tuesday.
Merchandisers have reported to DTN there are ample amounts of DDG currently on the market, with some hesitant buying in recent weeks as buyers awaited last week's holiday weekend and hoped for price declines. With the value of DDG so low for corn and soymeal, demand for DDG should spark as DDG recaptures its place in some rations.
Cheryl Anderson can be reached at email@example.com.
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