Ethanol Blog

U.S. DDG Export Market is Recovering

Cheryl Anderson
By  Cheryl Anderson , DTN Staff Reporter

In spite of issues challenging the ethanol industry, the U.S. is experiencing recovery in export markets for dried distillers grains, a speaker at the Distillers Grains Technology Council's annual symposium in Kansas City Thursday.

Alvaro Cordero, Manager of Global Trade for the U.S. Grains Council, spoke about some of the issues that have affected exports of DDG in the 2014/2015 marketing year.

The U.S. should initially have stable supplies of DDG through 2015/2016, however, growth in corn ethanol production may reach a cap because of the Renewable Fuels Standard. Cordero showed a chart showing no increases in ethanol production in the next five to seven years, but said he does not believe that will actually happen.

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"Ethanol is driving the (agricultural) industry, including grains," he said. "We would not have the high production we do today if not for ethanol."

There is, however, a bit of uncertainty on ethanol profitability due to the drop of oil prices.

Export demand for DDG is clearing up from mid-2014, as the U.S. recovers from the "MIR 162 saga," Cordero said. He added that the U.S. Grains Council is asking ethanol plants to follow a MIR 162 stewardship program, and that more than 60 plants are currently registered with China to export DDG with more in the pipeline.

Although Jan/Mar exports were down, the U.S. exports DDG to 80 countries currently.

Still, prices of DDG remain competitive to other feedstuffs, which will lead to relatively higher inclusion rates in U.S. swine and poultry, as well as increasing demand growth in foreign export markets.

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

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