DDGS value boosts US inclusion rates, exports to smaller markets

Source: By Sean Broderick, CHS • Posted: Friday, April 7, 2017

As April begins, DDGS prices emerge from the winter at one of its lowest values versus corn that has been seen in many years. The lack of business from Vietnam and China has made a huge impact on exports, and although other countries have been buyers in place of these two, the lack of enthusiastic demand they previously created is leading to muted prices.

Here in the U.S., values are low enough that most feeders are saving a significant amount of money by feeding DDGS, so they have it at a maximum inclusion rates in diets. Southeast poultry feeders are using DDGS in near record amounts, providing an outlet for a lot of plants that suffered from corn that was higher in vomitoxin in their local areas. The Mississippi River opened much earlier this year than normal, shifting product flow from the container yards in Chicago to the Gulf bulk markets.

With Asian demand lower than normal (for example, the U.S. Census Bureau reports Vietnam took 245,00 tons in November and zero tons in February), Mexico and Turkey accelerated their import tonnages, as did places like the UK, Portugal, Spain and Ireland. Clearly, in countries that don’t have outright bans, or prohibitive tariffs, the value of DDGS is without peer.

April is the month that a lot of plants take spring maintenance shutdowns, which will affect supply. Export demand should continue through the spring as freight keeps delivered prices competitive. Hopefully, weakness of the dollar and governmental policies keep exports strong.

LOCATION May 2017 April 2017 May 2016
Minnesota 92 90 115
Chicago 103 100 135
Buffalo, N.Y. 120 125 140
Central Calif. 150 152 179
Central Fla. 148 142 155