DTN Weekly Distillers Grains Update
DDG Demand Slow in Recent Weeks
The market for dried distillers grains has been slow in recent weeks as demand dwindles and livestock producers find other feed sources due to DDG prices being at a premium to other feedstuffs.
According to Joel Karlin, contributing DTN market analyst and commodity manager for Western Milling in Goshen, Calif., the market on the West Coast has been very quiet and prices steady, as demand slips based on DDG's high prices relative to corn and canola meal and the increased availability of mid-range-quality alfalfa hay.
"Use of DDG is just so-so as the energy component of rations are being satisfied by corn that is $60 per ton cheaper than DDG while canola meal and lower-grade alfalfa hay is satisfying protein requirements," Karlin said.
Some merchandisers have told DTN in recent weeks that supplies of DDG are somewhat tight. However, Karlin reports that supplies on the West Coast have been good due to slowing demand and a milder winter than last year contributing to better rail transport.
After 2014's trade debacles with China, Karlin said that the country's DDG imports have picked up, although some shipments have been delayed by the ongoing labor strikes at western ports. Container movements are reported slow on the West Coast as the International Longshore and Warehouse Union is on strike, slowing movement of containers in and out of the U.S.
The larger concern about China is the marked slowdown in its economic growth, Karlin said.
"Growth in the Chinese economy is seen now at its lowest pace in over a generation with some forecasters looking for China's 2015 Gross Domestic Product to come in a less than 7%," he said. "This has pared Chinese demand for a number of commodities including DDG."
The decrease in DDG shipments to China last year due to the MIR 162 controversy and the resulting DDG price decline has helped boost imports to other key regions, Karlin said.
Total sales to Mexico are up 23% from the year prior, while South Korea sales are up 75% and Vietnam is up 83%.
"Demand to the nations has been steady as good internal demand has been offset by the rising foreign exchange value of the U.S. dollar and falling high-protein meal values," he said.
In coming weeks, Karlin said he believes the market will remain somewhat lackluster.
"We are in a sluggish point of the year, so I imagine that markets will stay very quiet at least until the start of the 2015 growing season in the Northern Hemisphere," he said.
Karlin said any end users looking to buy product should remember this is the season DDG prices are typically at their highest.
"Seasonally, this is one of the worst times of the year to buy DDG with late February-early March often representing the highest values of the year with prices gradually falling all the way from now until August when DDG values tend to make their lows for the year," he said.
Cheryl Anderson can be reached at cheryl.anderson@dtn.com.
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IN THE NEWS
Survey Measures Impact of Corn Quality
Ethanol Producer Magazine recently tracked corn quality's impact by sending a survey out to management at 109 ethanol plants, according to an article by Ethanol Producer Magazine (http://bit.ly/…).
Responses from plants in Iowa, Minnesota and Wisconsin revealed that states such as Iowa, Minnesota and Wisconsin were affected by cold weather toward the end of the growing season, with great variances in test weights and yields from less than 54 pounds per bushel to 57 or more.
The survey may be helpful of plants to gauge how its corn supply compares to others in the industry, according to Charles Hurburgh, Iowa State University extension corn quality expert. The information gained may be especially important in marketing distillers grains, since issues with the incoming corn are concentrated three times in the resulting coproduct.
The survey also provided other insights, such as the high number of plants that measure every incoming load of corn for weight, moisture damage and foreign material. The majority of respondents also generally test corn for starch content, while much fewer respondents said they test for protein or oil, or aflatoxin and vomitoxin. Only one plant reported that loads are checked for fiber, one for density, and another for ash, calcium, phosphorus, magnesium, potassium and sulfur.
Measuring corn quality will likely become more important in the future, Hurburgh said. "For example, with front- or back-end fractionation, all of a sudden the oil content has a great deal to do with how difficult or easy it's going to be to get a good yield of oil per bushel," he said, according to the magazine.
Ethanol Co-Products Aid in Lower Footprint of Animal Production
Every beef production operation can be sustainable, no matter the size or breed of the herd, said Montana livestock consultant Jude Capper, at a recent beef conference. Capper added that being sustainable is not only for organic, grass-fed or local operations, according to an article for AgriNews (http://bit.ly/…).
While livestock operations are a frequent target for environmental activists, Capper said she believes the beef industry is making great progress in becoming more and more sustainable. In fact, Capper reported that according to data from the Environmental Protection Agency, animal agriculture only accounts for 2.1% of the total carbon footprint, much lower than earlier estimates.
One way that footprint is reduced is from the feeding of distillers grains, a valuable and nutritious feedstuff that would have a huge carbon cost if put into landfills. Also, beef producers can turn land unfit to grow crops into pastureland.
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Capper also said that because of improvements in breeding, feed and care for animals, it took about five animals in 1977 to make the same amount of beef as four animals in 2007. Also, days to slaughter have decreased during that time, from about 609 days in 1977 to 485 days in 2007. That decrease saves about 124 days of feed, land, water, greenhouse gases and energy, she said.
Cheryl Anderson can be reached at cheryl.anderson@dtn.com
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DTN WEEKLY DDG SPOT PRICES
| CURRENT | PREVIOUS | ||||
| COMPANY | STATE | 2/20/2015 | 2/13/2015 | CHANGE | |
| Bartlett and Company, Kansas City, MO (816-753-6300) | |||||
| Missouri | Dry | $190 | $190 | $0 | |
| Modified | $90 | $90 | $0 | ||
| CHS, Minneapolis, MN (800-769-1066) | |||||
| Illinois | Dry | $190 | $185 | $5 | |
| Indiana | Dry | $190 | $190 | $0 | |
| Iowa | Dry | $185 | $170 | $15 | |
| Michigan | Dry | $200 | $200 | $0 | |
| Minnesota | Dry | $165 | $165 | $0 | |
| North Dakota | Dry | $170 | NA | ||
| New York | Dry | $185 | $185 | $0 | |
| South Dakota | Dry | $170 | $180 | -$10 | |
| Hawkeye Gold, IA (515-663-6413) | |||||
| Iowa | Dry | NA | NA | ||
| Modified | NA | NA | |||
| MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253) | |||||
| Kansas | Dry | $185 | $185 | $0 | |
| POET Nutrition, Sioux Falls, SD (888-327-8799) | |||||
| Indiana | Dry | $170 | $180 | -$10 | |
| Iowa | Dry | $160 | $165 | -$5 | |
| Michigan | Dry | $175 | $175 | $0 | |
| Minnesota | Dry | $160 | $165 | -$5 | |
| Missouri | Dry | $185 | $185 | $0 | |
| Ohio | Dry | $175 | $175 | $0 | |
| South Dakota | Dry | $170 | $170 | $0 | |
| United BioEnergy, Wichita, KS (316-616-3521) | |||||
| Kansas | Dry | $190 | $190 | $0 | |
| Wet | $75 | $75 | $0 | ||
| Illinois | Dry | $195 | $195 | $0 | |
| Nebraska | Dry | $190 | $190 | $0 | |
| Wet | $75 | $75 | $0 | ||
| U.S. Commodities, Minneapolis, MN (888-293-1640) | |||||
| Illinois | Dry | $180 | $180 | $0 | |
| Indiana | Dry | $180 | $180 | $0 | |
| Iowa | Dry | $175 | $175 | $0 | |
| Michigan | Dry | $185 | $185 | $0 | |
| Minnesota | Dry | $165 | $165 | $0 | |
| Nebraska | Dry | $175 | $175 | $0 | |
| New York | Dry | $195 | $195 | $0 | |
| North Dakota | Dry | $190 | $190 | $0 | |
| Ohio | Dry | $180 | $180 | $0 | |
| South Dakota | Dry | $180 | $180 | $0 | |
| Wisconsin | Dry | $180 | $180 | $0 | |
| Valero Energy Corp., San Antonio, TX (402-727-5300) | |||||
| Indiana | Dry | $180 | $180 | $0 | |
| Iowa | Dry | $155 | $160 | -$5 | |
| Minnesota | Dry | $155 | $155 | $0 | |
| Nebraska | Dry | $170 | $175 | -$5 | |
| Ohio | Dry | $180 | $185 | -$5 | |
| South Dakota | Dry | $155 | $160 | -$5 | |
| Western Milling, Goshen, California (559-302-1074) | |||||
| California | Dry | $250 | $250 | $0 | |
| *Prices listed per ton. | |||||
| Weekly Average | $177 | $178 | $1 | ||
| The weekly average prices above reflect only those companies DTN | |||||
| collects spot prices from. States include: Missouri, Iowa, Nebraska, | |||||
| Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan, | |||||
| Wisconsin and Indiana. Prices for Pennsylvania, New York and | |||||
| California are not included in the averages. | |||||
*The spot prices gathered by DTN are only intended to reflect general market trends and may vary. Please contact individual plant or merchandiser for exact prices.
If you would be willing to take a weekly phone call and have your distiller grains spot prices listed in this feature, please contact Cheryl Anderson at (308) 224-1527 or (800) 369-7875, or e-mail cheryl.anderson@dtn.com.
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| VALUE OF DDG VS. CORN & SOYBEAN MEAL | ||||
| Settlement Price: | Quote Date | Bushel | Short Ton | |
| Corn | 2/19/2015 | $3.8975 | $139.20 | |
| Soybean Meal | 2/19/2015 | $347.50 | ||
| DDG Weekly Average Spot Price | $177.00 | |||
| DDG Value Relative to: | 2/20 | 2/13 | 2/6 | |
| Corn | 127.16% | 128.70% | 129.37% | |
| Soybean Meal | 50.94% | 53.57% | 53.71% | |
| Cost Per Unit of Protein: | ||||
| DDG | $7.08 | $7.12 | $7.12 | |
| Soybean Meal | $7.32 | $7.00 | $6.98 | |
| Notes: | ||||
| Corn and soybean prices taken from DTN Market Quotes. DDG | ||||
| price represents the average spot price from Midwest | ||||
| companies collected on Thursday afternoons. Soybean meal | ||||
| cost per unit of protein is cost per ton divided by 47.5. | ||||
| DDG cost per unit of protein is cost per ton divided by 25. | ||||
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USDA MARKET NEWS/DISTILLER GRAINS PRICES
USDA WEEKLY DISTILLERS GRAINS SUMMARY (Feb 13, 2015)
| Dried | Modified | Wet | |
| FOB PLANT PRICES PER TON | |||
| Iowa | 160.00-185.00 | 70.00-85.00 | 47.00-53.00 |
| Minnesota | 160.00-175.00 | 80.00 | 55.00-60.00 |
| Nebraska | 168.00-189.50 | 68.00-89.50 | 50.00-65.00 |
| South Dakota | 160.00-171.00 | 78.00-85.50 | 54.00-58.00 |
| Wisconsin | 175.00-190.00 | 77.00-90.00 | NQ |
| Eastern Corn Belt | 170.00-205.00 | 77.00-90.00 | NQ |
| Kansas | 180.00-205.00 | NQ | 60.00-68.00 |
| Northern Missouri | 187.00-210.00 | NQ | 65.00-71.00 |
| DELIVERED PRICES PER TON | |||
| CIF NOLA | 228.00-240.00 | ||
| Pacific Northwest | 238.00-248.00 | ||
| California | 235.00-248.00 | ||
| Texas Border (metric ton) | 262.00-276.00 | ||
| Lethbridge AB | 220.00 | ||
| Chicago | 194.00-205.00 | ||
Dried Distillers Grain: 10% Moisture
Modified Wet Distillers: 50-55% Moisture
Wet Distillers Grains: 65-70% Moisture
CALIFORNIA GRAIN AND FEED REPORT (Thu Feb 12, 2014)
Distillers Dry Grains (includes fuel)
| CURRENT | LAST REPORT | LAST YEAR | |
| Feb 12, 2015 | Feb 5, 2015 | Feb 13, 2014 | |
| Rail to California Points | 249.00-254.00 | 249.00-251.00 | Ind 270.00 |
| FOB Truck to California Points | 245.00-250.00 | 245.00-250.00 | Ind 297.00 |
PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue Feb 17, 2015)
Distillers Dried Grains: Offers for Distillers Dried Grains delivered in September by rail to feed mills in the Pacific Northwest were 2.00 to 3.00 lower from 240.00-248.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were also 2.00 to 3.00 lower from 258.00-263.00.
*All prices quoted per ton unless otherwise noted.
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RFA WEEKLY U.S. LIVESTOCK FEED PRODUCTION
| CO-PRODUCT OUTPUTS (metric tons) | |||||
| Week Ending | Distillers Grains | Corn Gluten Feed | Corn Gluten Meal | Total Feed | Corn Oil (lbs.) |
| 1/16/15 | 97406 | 10002 | 1852 | 109259 | 5759489 |
| 1/23/15 | 97306 | 9991 | 1850 | 109148 | 5753606 |
| 1/30/15 | 94321 | 9685 | 1793 | 105800 | 5577115 |
| 2/06/15 | 95615 | 9818 | 1818 | 107250 | 5653594 |
*Information from 2010 Weekly U.S. Fuel Ethanol/Livestock Feed Production report (http://www.ethanolrfa.org/…)
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DDG LINKS/RESOURCES
Organizations
*Distillers Grains Technology Council
http://www.distillersgrains.org
*National Corn Growers Association Corn Distillers Grains Brochure
*Iowa Corn
Nebraska Corn Board
*Renewable Fuels Association - Ethanol Co-Products
*American Coalition for Ethanol
*U.S. Grains Council
*South Dakota Corn Utilization Council
http://www.drieddistillersgrains.com
Government Sites
*Iowa Department of Agriculture and Land Stewardship/Office of Renewable Fuels & Coproducts
http://www.distillersgrains.com
University Sites
*University of Minnesota - Distillers Grains By-Products in Livestock
and Poultry Feed
*University of Illinois - Illinois Livestock Integrated Focus Team Distillers Grains site
http://ilift.traill.uiuc.edu/…
*University of Nebraska - Beef Cattle Production By-Product Feeds site
*University of Nebraska Extension
*Iowa Beef Center - Iowa State University
http://www.iowabeefcenter.org/…
*University of Missouri - Byproducts Resource Page
*South Dakota State University - Dairy Science Department - Dairy cattle research
(select "Distillers Grains" from the topic menu)
*Purdue University Renewable Energy Web Site
http://www.extension.purdue.edu/…
(select "Biofuels Co-Products from the menu)
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DDG CONFERENCES
If you are sponsoring or know of any event, conference or workshop on distillers grains, and would like to list it in the DTN Weekly Distillers Grains Update, please contact Cheryl Anderson (see contact info below).
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We welcome any comments/suggestions for this feature. Please let us know what information is valuable to you that we could include in the Distillers Grains Weekly Update. Please feel free to contact Cheryl Anderson at (402) 364-2183, or e-mail cheryl.anderson@dtn.com.
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