Ethanol Blog
Cheryl Anderson DTN Staff Reporter

Thursday 07/25/13

Analysis: DDGS Valued at 89% of Corn

A recent analysis of the value of dried distillers grains with solubles shows an average of 89% of the value of corn in the past six years, according to an article by Midwest Producer (http://bit.ly/…).

Pricing of DDGS is most influenced by the relative value of energy and protein, as well as prices of corn and soybean meal. But University of Illinois economists found substantial variations to those relationships.

The prices of DDGS have ranged between less than 70% to almost 110% of the value of corn, with an average of 89% from the time period of January 2007 through July 2013. Also, DDGS is priced at a substantial discount to soybean meal.

Using a simple linear regression model to compare price patterns, the economists estimated that DDGS prices changed by 85 cents per ton for each $1 per ton change in the price of corn. Prices of DDGS changed by 11 cents per ton for each $1 per ton change in the price of soybean meal.

Over the six-year time period studied, the model indicated that the combination of corn and soybean meal prices accounted for 92% of the variation in DDGS prices.

Cheryl Anderson can be reached at Cheryl.anderson@telventdtn.com

Posted at 2:29PM CDT 07/25/13 by Cheryl Anderson
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