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Distillers Grains Marketplace Expands

Over 17 million tons of DDGS are likely to be available for feed this year.

The U.S. ethanol industry is likely to produce between 17 and 18 million tons of distillers grains for livestock feed in the 2007/08 marketing year, the National Corn Growers Association says - three times the amount available four years earlier.

"Many believed we'd be facing a surplus of distillers grains by now, but we certainly haven't seen that materialize," says NCGA Ethanol Committee chairman Bruce Noel. "Demand is very high. It's become a mainstream ingredient in livestock rations and we're seeing it used in all parts of the country."

Although some economists and policymakers have expressed concerns that rising corn prices due to ethanol production demand will cause problems for livestock producers and food prices, NCGA has often voiced an opinion that U.S. farmers can produce enough corn to supply both the ethanol industry and livestock feed markets. Livestock producers' use of distillers grains is an important part of that vision.

"To the ethanol producer, it's a valuable coproduct that increases the bottom line," Noel says. "And to the feeder, it's a good source of protein and energy normally offered at a lower price relative to other ingredients."

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