DDG supply shortage already impacting livestock rations and price

The reduction in gasoline usage across North America has put a death grip on ethanol producers. Plants have been scaling back production to try and stay solvent as storage capacity fills. Aside from the impact less ethanol production has on corn and utility wheat demand, livestock producers that use distillers’ dried grains (DDGs) in feed rations are growing ever concerned about the supply of the ethanol byproduct.

RealAgriculture has reached out to several feedyards and has heard mixed levels of concern regarding DDG supplies. Some have been told that contracts in place cannot be filled or will be cut back 50 per cent. Other feedyards indicated they were getting the supply required, but were paying much more for it. Feedyard owners disclosed that they were facing supply concerns from U.S.- and Canadian-produced DDGs.

What is happening to DDG prices?

Feedyards surveyed by phone indicated similar experiences with DDGs being priced into Lethbridge for 15-20 per cent more than feed barley prices. Currently, DDG prices into Lethbridge are around $305 – $325 per tonne while feed barley is $235 /mt.  According to the USDA, on April 2, DDGs were priced in Nebraska at US$175-222/ton. Across the surveyed states, prices are up around US$30/ton compared to last week. While the western Iowa price is US$174 per ton this week, the comparable five-year average is under US$140 per ton.

Why are DDGs fed to cattle?

In terms of the feeding value of DDGs, the BCRC website states:

Corn WDGS enhances feed efficiency of corn-based diets by up to 13 per cent with a response proportional to the level in the diet up to 50 per cent (dry basis). Corn DDGS enhances feed efficiency up to 5 per cent with the maximum response from between 10 and 20 per cent inclusion in the diet.  At dietary inclusion rates up to 20 per cent, wheat DDGS gives similar feed efficiency to a barley-based control. Above 20 per cent inclusion, wheat DDGS has had no effect or caused a slight decline in feed efficiency by up to 9 per cent.

What would livestock producers do if supplies dry up?

Producers would have to switch to another source for protein, which could be canola meal or other substitute products. Traditionally, DDGs are a less expensive protein choice, and a good fit for many rations, including dairy cattle, sheep, and poultry. Swapping sources protein also means reformulating rations from square one — which could also mean having to source different components, such as amino acids.

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