USGC: Unlocking opportunities for DDGS in Canada

By U.S. Grains Council | July 30, 2015

A team of Canadian buyers and end-users of U.S. distillers dried grains with solubles (DDGS) as well as a Canadian agriculture journalist recently visited the United States on a learning journey cosponsored by the U.S. Grains Council and the Corn Marketing Program of Michigan.

Their travel focused on exploring additional ways to cut logistical costs and increase demand for U.S. DDGS and corn and included a tour of an ethanol plant, which was a highlight for some of the Canadian participants who had never seen ethanol production.

“All that lies between Michigan and Ontario is the St. Clair River,” said Jim Zook, executive director of the Corn Marketing Program of Michigan. “Despite the proximity, there are recurring price differentials for corn, and freight cost are often inflated by truck deadheading. Those are problems we can address.”

The plant exports 90 percent of its DDGS to Canada and so the visit included lively discussions about the use of antibiotics in ethanol production; how to overcome constrains in DDGS inclusion rates due to pelleting problems; and how to utilize low-oil DDGS.

The team also heard a presentation about the current outlook for the 2015 U.S. corn crop and its potential impacts on next year’s DDGS production.

Truck logistics were another area of focus. Several participants noted that trucks were deadheading in both directions, which is wasting capacity and driving up costs. The team expressed interest in developing a more comprehensive list of trucking contacts and improving coordination on both sides of the border.

“We want our Canadian neighbors to get comfortable with the sourcing,” Zook said. “Canadian imports of DDGS are up more than 80 percent January to May this year as compared to the same period a year ago and we want to see that continue.

“It’s just good business to do more business with our next door neighbors.”

Click here to view more photos from this team.