Home / News / Business news / Expanding distiller grains markets

Expanding distiller grains markets

DANIEL LOOKER 10/08/2010 @ 12:27pm Business Editor

As the ethanol industry grows toward a 15 billion gallon market by 2015, exports of its byproduct, distillers grains, are expected to grow from 7 million metric tons (mmt) last year to 11 mmt,

That’s the outlook from Erick Erickson, the U.S. Grains Council’s special assistant for planning, evaluation and projects.

But when he spoke to the Export Exchange in Chicago Friday, he cautioned that the easy part of growth in distillers grains exports –and it hasn’t always been easy – may be over.

“Moving forward from here is going to require an intensification and enhancement of promotion,” Erickson said.

China has gone from importing almost no distillers grains in 2008 to becoming the largest customer, likely to buy 2.5 mmt of distillers grains by the end of this calendar year. Mexico, once our largest buyer, and Canada, remain top customers, due in part to lower transportation costs.

But, Erickson said, China won’t import distillers grains if the price rises above its own internal costs for corn. That and policy issues, “can turn the market off in an instant,” he said.

It wouldn’t be the first time that has happened. The European Union, once a major buyer of ethanol byproducts for feeding, has virtually stopped due to its restrictions on biotechnology, Erickson said.

And Turkey, which was the number 3 buyer of distillers grains two years ago, stopped buying distillers grains in September because new regulations on biotech corn imports are being considered, he said.

Some European mills, in Ireland and Spain for example, still want to import distillers grains, he said.

And imports to Turkey are still possible, one guest from that nation told Erickson when he asked if it’s possible to buy pelleted distillers grains. It is, Erickson said, if the buyer is willing to pay for the cost of making pellets.

Distillers grains face several obstacles in trade beyond government restrictions. They can’t be stored as long as corn for grain and buyers have concerns about flowability and consistency. Also, there are limits on how much of a feed ration can be switched from corn and other ingredients to distillers grains, ranging from about 40% for beef cattle, to 30% for swine, 15% for poultry and 10% for shrimp.

New customers are rarely willing to feed up to those limits, however, and the Grains Council over the past five years has held 270 seminars on feeding distillers grains. And it has run 40 feeding trials in 13 countries.

For buyers, another issue is whether the supply of distillers grains will be stable. The U.S. is the only net exporter of distillers grains in the world and some of its customers seemed concerned about the supply.

CancelPost Comment

A Budget Dream Deferred? By: 03/17/2015 @ 4:50pm Agriculture appears to have dodged a big spending cut in the 2016 federal spending goals released…

Will Ag Go Under Budget Ax? By: 03/16/2015 @ 7:06pm What do the American Federation of Teachers, Camp Ronald McDonald at Eagle Lake, Ducks Unlimited…

Des Moines Water Works Will Go to Court By: 03/10/2015 @ 8:58pm Two months ago, the Des Moines Water Works gave 60 days' notice to 10 drainage districts in…

This container should display a .swf file. If not, you may need to upgrade your Flash player.
Planter tips: Pneumatic seed meters