Breakthrough in Saudi subsidy list opens door for US DDGS imports

By U.S. Grains Council | August 05, 2011

Culminating years of U.S. Grains Council efforts, the Kingdom of Saudi Arabia has added distillers dried grains with solubles (DDGS) and corn gluten feed to its import feed ingredient subsidy list, creating a strong incentive for sales. It also increased the subsidy for sorghum, a step expected to lead to more sorghum inclusion.

The new list establishes a subsidy for 31 specified imported feed ingredients, which is to be passed down the supply chain to keep feed input costs low for producers and end-users. Ingredients not on the subsidy list have historically attracted little attention.

“The Council has ramped up its marketing activities tremendously in the past three years,” says Joe O’Brien, USGC regional director in the Middle East. “Saudi Arabia is a lucrative feed importing market that could quickly build its DDGS purchases to a half-million metric tons and could reach one million tons in time.”

He notes that Saudi Arabia has some of the largest dairy farms in the world, including several with 40,000 to 50,000 head and one with more than 115,000 Holsteins.
Council efforts have included highly successful sorghum feeding trials with Saudi Arabia’s largest feed importer and poultry integrator, repeated visits by livestock nutritionists and marketing consultants, and council-sponsored Saudi visits to the United States and third-party countries to build confidence in the U.S. supply chain from farmer to customer.

USGC marketing efforts are continuing, according to O’Brien, who said plans are in the works for another USGC consultant visit to Saudi Arabia and for a Saudi nutritionist/buyer team to visit the United States this fall.

The new subsidy list was officially announced by the Saudi Arabian government last week, just ahead of the start of the holy month of Ramadan.