Last week, I wrote about the changes in synthetic amino acid supplies that will be impacting our industry in the coming months. Since then I’ve talked with several producers and suppliers about the impact of the change.
One obvious impact will be on the use of DDGs in swine diets. DDGs retains the amino acid profile of corn. This means it is deficient in lysine and its use in swine diets is highly dependent on the pricing of synthetic lysine.
The use of DDGs also is also dependent on the economics of ethanol production as plants price this co-product as a residual income stream, meaning it is priced to move it from inventory, whatever price that takes.
Currently ethanol producers in the upper Midwest are being impacted by the rail car availability issues that are also plaguing the grain markets, especially those in western Iowa, western Minnesota and the Dakotas.
At least one ethanol plant in this region that historically sold all of their DDGs by rail car are now making it available to local feed mills. There are reports of ethanol plants being limited on output because of the lack of rail cars to transport the ethanol.