USGC helps open new market for US DDGS in Ecuador

By U.S. Grains Council | October 01, 2018

Utilizing Market Access Program funds, the U.S. Grains Council’s Western Hemisphere Office has opened up a new market for U.S. dried distillers grains with solubles (DDGS) in Ecuador by working directly with a major buying group, which represents roughly 25 percent of national feed production for poultry and swine and 65 percent for shrimp.

The Council had initial meetings with the group’s executive director in December 2016 to discuss usage and potential economic benefits of U.S. DDGS. As a result, the group imported their first shipment of DDGS in April 2017. Following that purchase, the Council continued to provide technical advice on how to use DDGS in poultry diet—critical to success since many of the group’s companies had little or no experience using the ingredient. The company made a second purchase of DDGS in early 2018, bringing their total DDGS purchases to 11,000 metric tons, worth $1.9 million.

Ecuador currently restricts corn imports based on a corn self-sufficiency policy and, as a result, U.S. DDGS provides valuable savings to local producers. In the short term, the Council believes Ecuador has the potential to utilize 50,000 tons of DDGS per year. Because of this, the Council’s work has been directed towards educating potential end-users on how to formulate with DDGS. Ecuadorian imports of U.S. DDGS have grown from 5,600 tons in the 2015/2016 marketing year to 12,500 tons in the 2016/2017 marketing year.

With continued work, there is likely to be substantial additional growth as more major producers express interest in DDGS.

Before the Council’s efforts, the company had never purchased DDGS before. With their recent purchase, members have expressed plans to continue using DDGS on a regular basis, expecting to buy 6,000 tons every four months. At current prices, these sales alone represent potentially more than $3 million dollars every marketing year.

The Council’s investment of approximately $5,000 to support these promotional efforts resulted in 11,000 metric tons of DDGS purchased, valued at $1.9 million and with a return on investment (ROI) of $380 per $1 of MAP funds invested.