Ethanol coproduct feed prices have increased since the beginning of the year, albeit not to the record prices posted in August 2012 when corn price peaked. Prices for dried distillers grains plus solubes (DDGS) were about $258/ton in South Dakota last week, up $4/ton since the first week of January. Similarly, wet distillers grains plus solubes (WDGS) prices were $3/ton higher, averaging $95.25/ton. Modified wet distillers grains plus solubes (MWDGS) prices have risen more than $7/ton since the beginning of the year to average $143/ton last week. On a dry matter (DM) basis, coproduct prices have increased $4.51/ton, $15.30/ton, and $9.29/ton since the beginning of the year for DDGS, MWDGS, and WDGS, respectively.
While coproduct feed prices are not as volatile as some commodity prices, they do still tend to exhibit variability over time and seasonal trends are hard to identify. The seasonal indices of South Dakota DDGS, MWDGS, and WDGS prices shown in Figure 1 have a fairly wide standard deviation, but the average seasonal index shown for each of the products is still useful in assessing market conditions and planning future purchases. Note that prices from 2008-2012 have seasonally peaked in the third week of January, and DDGS and MWDGS generally decline about 4% through the twelfth week of the year (about the end of March). While WDGS seasonally increase through about the tenth week of the year, they have historically found a Spring-time bottom during the eleventh or twelfth week of the year. Coproduct prices seasonally tend to increase through the end of June before moving to their annual low in the late summer months.
It appears so far that 2013 may be one of those years that doesn’t follow the seasonal trend very closely. Instead of decreasing about 4% since the beginning of the year, DDGS have increased 1% since the third week of January and MWDGS and WDGS prices have increased 3%. Since their highs posted the second week of February, DDGS prices have only declined 2% and MWDGS and WDGS have remained about steady.
Another way to examine ethanol coproduct prices is to compare their price relative to corn on a DM basis. As shown in Figure 2, coproduct prices have been increasing relative to corn during the past couple of months. Currently, DDGS and MWDGS prices are about 96% of corn price (DM basis), while WDGS price is 91% of corn price. The previous six-year average for this time of March is about 84% for DDGS and 72% for MWDGS and WDGS.