US corn, DDGS compete in Canada for feed grains market share

By U.S. Grains Council | November 01, 2017

A short hour north of the Montana border, the U.S. Grains Council is exploring the geographic advantage of unit trains carrying U.S. corn and distillers dried grains with solubles (DDGS) to Canadian feedlots around Lethbridge, Alberta. 

A trade mission in October crisscrossed the region, visiting with cattle feedlots, feed manufacturers and rail facilities to find the best opportunities to expand inclusion of U.S. feed grains and coproducts in local rations. The Canadian livestock feed demand is highly competitive with many alternative energy and protein feed ingredients available for producers, but the United States is well-positioned to meet this need due to close proximity to northern U.S. ethanol plants as well as the efficiency of transportation by unit train. 

“There was a great buzz related to corn availability created during the trade mission,” said Neil Campbell, general manager of Gowans Feed Consulting, who works as a USGC consultant in Canada. “The timing is excellent to promote U.S. corn and DDGS in feedlot diets. The more corn that comes in, the more it will help the supply demand balance on feed grain.” 

The first unit train of corn sold in the 2017/2018 marketing year was delivered into Lethbridge the week before the recent mission. Thanks to continued market development work by the council and its Canadian consultants, more U.S. corn and DDGS will head north in the year to come. 

Canada imported 670,000 metric tons (26.4 million bushels) of U.S. corn in 2016/2017 as well as 735,000 tons of U.S. DDGS, a 13 percent increase year-over-year. While these sales made Canada the sixth largest market for U.S. DDGS, Canada has the potential to utilize more than four million tons of DDGS annually, which the council is working to capture. 

In the Lethbridge area, U.S. corn can be railed directly into the region on unit trains. Favorable pricing combined with these logistical opportunities promote inclusion into local feed rations. The council is working with other Alberta feedlots to support the development of additional trans-loading facilities in the region to further provide opportunities for rail shipments from the United States. 

The council and Gowans Feed Consulting also developed a relative value calculator that demonstrates the continued advantages of including corn and DDGS into livestock rations, which will further encourage local feedlots to evaluate the competitiveness of U.S. feed grains and co-products. This effort directly supports sales by increasing awareness of when buying opportunities arise. 

Learn more about the council’s work in Canada here.