Market Matters Blog
Pat Hill DTN Markets Editor

Wednesday 06/20/07

DDG Survey May Clarify Feed Usage

Just what we need -- another set of numbers from USDA. Still, there seems to be a fair bit of interest in a report Uncle Sam will release June 29, regarding use of distillers dried grains by the livestock industry.

The report will summarize the results of a survey conducted by the Nebraska Corn Board and USDA's NASS (National Ag Statistics Service).

"The National Corn Board would like to see all the DDGs produced by ethanol plants consumed in the U.S.," said Kelly Brunkhorst, Ag Promotion Coordinator, Nebraska Corn Board. "This survey was needed to understand barriers to increased DDG usage."The survey asked what characteristics feeders like and don't like, and it should show "more generalities" like what factors influence inclusion rates.

The livestock industry has had a lot of questions about how much DDG is being used, so any benchmark that comes out of this survey should be of some value. But NASS has not released the actual questions that were included in the survey, so until we see the report, we won't know how much it will help us, said DTN Livestock Analyst John Harrington.

Some analysts are hoping that this new set of numbers will help clear up some long-standing concerns about an old set of numbers, USDA's feed usage numbers.

Unlike exports, feed usage numbers are not actually measured, but are instead derived (total production, minus what's been exported, minus what's left over gives you implied disappearance, or feed usage). Analysts have grumbled for years about how feed usage is a catchall number, subject to USDA revision and re-revision.

DTN Premium Services provider Allendale delved into that possibility in these comments earlier this week: "Could it be the long awaited results via USDA to explain how rather than half a pound of corn and half a pound of soybean meal replaced for each pound of DDG fed, the ratio could be seven tenths of a pound of corn and three tenths of a pound of soybean meal is replaced when a pound of DDG is fed. This is a topic in which USDA has been battling for more than half a year and may reach a conclusion the SAME DAY as the quarterly grain stocks and planted acreage report is released. How inappropriate of a time could USDA peg. USDA may have a surprise in store for bigger quarterly corn stocks than what third quarter corn used for feed typically is. Why else would USDA use the SAME EXACT DAY, other to possibly smooth over and explain via research why the quarterly corn stocks are larger than usual. Coincidence by allowing this special DDG report to be released the same day? Allendale suggests it is anything but coincidental."

We'll join Harrington, Allendale and the rest of the livestock world at 2 p.m. on the 29th to see what can be gleaned from this latest set of tea leaves.

Posted at 1:57PM CDT 06/20/07 by Pat Hill
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