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Mexico Likely to Stay Big Buyer of Distillers Grains

Canada is second biggest buyer.

The biggest buyer of the distiller's dried grains that produced by American ethanol plants is Mexico, which imported 708,000 metric tons of the high-protein animal feed in 2007. Canada is in second place with 317,580 tons.

Already this year, Mexico has imported 699,000 tons and will likely buy 4 million in the foreseeable future, according to Julio Hernandez, U.S. Grains Council director in Mexico and Central America.

However, the current financial crisis does pose a threat because it could slow growth in Mexico's booming livestock and poultry industries.

The poultry industry is the strongest sector in Mexico, demanding the greatest amount of feed ingredients. An increase in broiler capacity has occurred in the last three years and a steady continuation of this trend is anticipated, Hernandez said.

Hernandez calculates Mexico's poultry sector will eventually import 1.1 million tons of DDGS. In addition, the beef sector has the potential to use 1 million tons; dairy 890,000 tons; and swine 788,000 tons. He said the Council will also explore promoting distiller's grains beyond the livestock and poultry industries in an effort to maximize profitability for agribusinesses and U.S. farmers.

"We see great potential for DDGS outside the typical markets. The aquaculture and pet food industries are two examples of sectors that have great potential in terms of incorporating DDGS," he said. "The Council is currently conducting a study to better understand these businesses. Mexico has a lot of room for growth. Don't rule us out yet."

His remarks came at a recent U.S. Grains council conference in Indianapolis, Ind.

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