DDGS value boosts US inclusion rates, exports to smaller markets

By Sean Broderick, CHS | April 06, 2017

As April begins, DDGS prices emerge from the winter at one of its lowest values versus corn that has been seen in many years. The lack of business from Vietnam and China has made a huge impact on exports, and although other countries have been buyers in place of these two, the lack of enthusiastic demand they previously created is leading to muted prices.

Here in the U.S., values are low enough that most feeders are saving a significant amount of money by feeding DDGS, so they have it at a maximum inclusion rates in diets. Southeast poultry feeders are using DDGS in near record amounts, providing an outlet for a lot of plants that suffered from corn that was higher in vomitoxin in their local areas. The Mississippi River opened much earlier this year than normal, shifting product flow from the container yards in Chicago to the Gulf bulk markets.

With Asian demand lower than normal (for example, the U.S. Census Bureau reports Vietnam took 245,00 tons in November and zero tons in February), Mexico and Turkey accelerated their import tonnages, as did places like the UK, Portugal, Spain and Ireland. Clearly, in countries that don’t have outright bans, or prohibitive tariffs, the value of DDGS is without peer.

April is the month that a lot of plants take spring maintenance shutdowns, which will affect supply. Export demand should continue through the spring as freight keeps delivered prices competitive. Hopefully, weakness of the dollar and governmental policies keep exports strong.

LOCATION

May 2017

April 2017

May 2016

Minnesota

92

90

115

Chicago

103

100

135

Buffalo, N.Y.

120

125

140

Central Calif.

150

152

179

Central Fla.

148

142

155