Ethanol Blog

Even though prices of distillers grains have increased since most of 2014, DDG is still a good value for livestock rations.

According to an article on Cattle Network by Darrell Mark, South Dakota State University Extension (http://bit.ly/…), dried distillers grains with solubles and wet distillers grains with solubles have increased about $44 per ton and $31 per ton respectively on a dry matter basis since January 1.

Even though it is still the prices of DDGS relative to corn that determine its use in rations, those values have been trading as high as 154% in January, falling to about 129% currently.

The strength in DDGS prices has been supported by good ethanol margins and increased production, robust export demand, modest increases in livestock numbers and surging soybean meal prices.

Mark maintains that DDGS can still be profitable to use in feedlot rations in spite of high values, because of their tendency to improve feed conversion and average daily gain. Mark wrote that in late 2013, when the WDGS price was 113% of corn price and the DDGS was 138%, a ration for finishing a 750-pound steer containing WDGS and DDGS at 20% inclusion could improve feeding margins by $33 per head and $12 per head respectively, compared to a corn-only ration.

Feeding WDGS at higher inclusion rates tended to slightly reduce margins, Mark said, "So, it is still possible to include distillers grains in feedlot cattle rations. However, to do so profitably, inclusion levels generally have to be decreased and the wetter co-products have to be used instead of DDGS. Even then, cattle performance has to be better in the co-product-based rations compared to corn-only rations."

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

(ES)

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