Feed weekly outlook: DDGs becoming another feed option

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MarketsFarm – As traditional feed grains such as barley and wheat become more expensive due to persistent drought-like conditions in the Prairies, many feedlots are using alternative sources of feed for their animals.

Dried distillers grains with solubles (DDGs), the grain by-products which remain after starch has been fermented through the making of alcohol or ethanol, are taking up a larger portion of feed rations. While an animal’s diet entirely made up of DDGs is not recommended, they have nutritional benefits.

“(DDGs are) high in protein and fat, with the nutrient value of the corn kernel…increased by a factor of three. (They are) excellent feed for cattle and dairy cows, and has been increasingly used in hog and poultry rations, as well. It is a product that should be well familiar to nutritionists,” Sean Broderick, trading manager for CHS Inc. in Minneapolis, Minn. wrote in an email.

Feed barley and feed wheat in Western Canada have increased in price between C$2.70 and C$4.76 per bushel over the past year, according to Prairie Ag Hotwire data from Aug. 4. Because of rising prices, there has been greater demand for other feed sources including DDGs.

“We are seeing good demand from the Canadian markets that have traditionally relied on feeding barley, and are sourcing a lot of it from (Canadian Pacific Railway) located plants in southern Minnesota and northern Iowa,” Broderick wrote.

However, Canada is not the only country where DDGs are growing in popularity.

“Mexico is the biggest (United States) customer for DDGs since it can move efficiently by rail.  Southeast Asia has also been a big export customer, as they are able to utilize shipping containers filled with consumer goods destined for the U.S. market, which would otherwise be going back empty,” Broderick added.

Still, the market for DDGs in Canada is going strong.

“We have seen a significant uptick in Canadian demand for DDGs, and expect that to continue,” Broderick added.

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