Experts told participants of the Renewable Fuels Association’s 14th Annual National Ethanol Conference Feb. 23-25 in San Antonio that the current economic situation is causing people to realize the importance of distiller’s dried grains with solubles to the profitability and sustainability of the U.S. ethanol industry. Charlie Staff, executive director of the Distillers Grains Technology Council, said it is vital for the survival of the ethanol industry to get the most profitability possible out of marketing DDGS. 

“DDGS is the best part of the fuel ethanol industry currently. If it wasn't for distiller’s grains, given where we are right now with profit margins, there wouldn't be an ethanol industry,” said Staff.

Despite the ethanol slowdown, the DDGS output continues to increase making marketing efforts of the U.S. Grains Council pertinent to the industry, according to Scott Richman, senior vice president for Informa Economics. He said DDGS production is reaching “ever higher levels.” He said 26 million tons of U.S. DDGS were produced in 2008 and 29 million tons, possibly 30 million tons, will be generated this year. This is representative of a 10 percent growth in DDGS output each year. Richman said the increase is making exports of DDGS “more and more” important for the U.S ethanol industry and corn growers as the Midwest becomes “saturated” with the ethanol co-product.

“Exports have increased significantly as production has reached new heights. The tremendous increase is due to the efforts of the U.S. Grains Council who has substantial programs going on in different countries around the world. Mexico and Canada have grown into huge markets for the co-product (1,188,766 metric tons and 771,797 metric tons in 2008 respectively),” said Richman. “A little more unusual is the success in Asia, where the U.S. Grains Council has focused a great deal of its efforts. With this come challenges with the availability of containers. This keeps DDGS marketers and the U.S. Grains Council on their toes.”

Source: U.S. Grains Council