Lower Availability of DDGS


The National Agricultural Statistics Service reports that output of DDGS during the first ten months of 2018 fell 12.1 percent to 3.515 million metric tons compared to the corresponding period in 2017. The lower availability of DDGS is attributed directly to a proportional decline in output of ethanol since DDGS is a byproduct of corn fermentation.

Exports of ethanol representing a surplus of availability over domestic requirements has fallen partly due to cessation of U.S. imports by China.

Demand for DDGS is determined by inclusion rates in hog and poultry diets as determined by unit values for energy and to a lesser extent by amino acids compared to alternative ingredients. Diminishing the quantity of feedstock diverted from feed to produce ethanol makes available more corn to livestock producers at a cost which is more competitive with DDGS as an ingredient to be incorporated into least-cost formulations.