After years of U.S. Grains Council efforts, the Kingdom of Saudi Arabia has now added corn gluten feed and distillers dried grains with solubles to its import feed ingredient subsidy list. This creates a strong incentive for sales of the U.S. ethanol co-products.

Saudi’s new list establishes a subsidy for 31 specified imported feed ingredients, which is to be passed down the supply chain to keep feed input costs low for its producers and end-users, points out the National Corn Growers Association. Ingredients not on the subsidy list have historically attracted little attention.

"The Council has ramped up its marketing activities tremendously in the past three years," says Joe O'Brien, USGC Middle East regional director. "Saudi Arabia is a lucrative feed importing market that could quickly build its DDGS (distillers dried grains with solubles) purchases to a half-million metric tons and could reach 1 million tons in time."

In the long term, growing U.S. DDG exports globally will compete with domestic supplies, and could raise product prices. U.S. pork, beef, dairy and poultry producers have all increased the use of these ethanol co-products as a way to buffer dramatically increased corn costs. China is another country that’s expected to find an appetite for DDG products.

O’Brien reports that Saudi Arabia has some of the world’s largest dairy farms, including several with 40,000 to 50,000 head and one with more than 115,000.

USGC efforts have included repeated visits by livestock nutritionists and marketing consultants, and USGC-sponsored Saudi visits to the United States and third-party countries to build confidence in the U.S. supply chain.

O'Brien says plans are in the works for another USGC consultant visit to Saudi Arabia and for a Saudi nutritionist/buyer team to visit the United States this fall.

Source: National Corn Growers Association