Prices of dried distillers grains will likely remain firm until the back-up in railcar availability improves, according to a number of DDG merchandisers and market analysts.
Problems with logistics were initially triggered by a non-stop barrage of severe winter weather that caused delays in rail car deliveries. When the back-ups continued to snowball, ethanol plants were forced to slow down production as their storage tanks neared full capacity.
When plants curbed ethanol production, DDG production also fell behind, creating a tightness in DDG supplies that has pushed prices upward for almost two months.
The situation at plants is currently dire, ...