2022 ANNUAL REPORT

Commodity: DDGS

First-Ever Conference In Kingdom Of Saudi Arabia Promotes DDGS

In its first conference ever held in the Kingdom of Saudi Arabia (KSA), the U.S. Grains Council (USGC) welcomed more than 45 feed millers and importers in Riyadh, promoting U.S. corn and distiller’s dried grains with solubles (DDGS). The country’s government has relaxed its visa processing, making conferences like this one easier to organize. The Council hopes to conduct more there in the future.

“Saudi Arabia is an exceptionally developed feed market, yet their use of DDGS continues to lag behind global standards. They have untapped potential to experience further savings from DDGS inclusion in feed rations, not only in their burgeoning poultry sector, but also in their world-leading dairy sector,” said Reece Cannady, USGC assistant regional director for Europe and the Middle East.

The conference was timely, as the Saudi market plans to push broiler production from 60 percent self-sufficiency to 85 percent self-sufficiency (1.3 million metric tons (MMT) of broiler meat) by 2030 as part of its VISION 2030. There is great interest in alternative ingredients, like DDGS that can be found in the U.S., as prices are very high for raw materials.

Following welcome remarks from Ramy H. Taieb, USGC Europe, Middle East and Africa regional director, and Mark Ford, USDA’s Foreign Agricultural Service regional agricultural attaché, attendees heard from Council members POET and the Andersons Inc. about DDGS nutrition, container and bulk logistics and sales potential. Additionally, Cannady presented a market overview for corn and corn co-products.

“Attendees had an exceptionally positive response to the conference. Not only are customers interested in learning about alternative products, but the conference also resulted in a 12,000 MT sale to the Kingdom, which should influence the market to take more product in the near future,” Cannady said.

Council staff held meetings with importers around Riyadh to discuss sales following the conference and before traveling to Al Kharj to engage with MEFSCO, a wet milling plant, as part of the organization’s global initiative to promote U.S. corn’s supremacy in wet mill yields.

“Saudi Arabia will continue to see engagement from the Council, as the potential for growth in DDGS use is as good as there is in the world. We expect for corn and co-product promotion to grow in the years to come,” Cannady said.

MOUs Signed With Partners In Mexico To Solidify DDGS Imports

In 2022, the U.S. Grains Council (USGC) hosted a group comprised of Indiana Corn Marketing Council representatives in Merida, Mexico, to meet with the organization’s memorandum of understanding (MOU) partner, AGRANS, a DDGS and grains merchandising company, and to witness their investment of distiller’s dried grains with solubles (DDGS) bagging equipment in action.

The bagging equipment in action.

“This group of Indiana agriculture stakeholders had the opportunity to see their investment firsthand in the AGRANS facility’s use of the granted equipment. Individuals were given the opportunity to observe the facility’s processing systems, share their vision with the company’s leadership, and witness exactly how their equipment contribution impacted the company’s efficiency and overall ability to promote the use of more U.S. DDGS. These missions are imperative to the success of the Council, and we greatly appreciate the time and dedication of the Indiana Corn Marketing Council,” said Amelia Iliohan, USGC manager of industry relations.

The group also had the opportunity to visit with grains and DDGS customers who will benefit from Indiana’s investment. The equipment will create a more manageable bagged DDGS product for their customers to use in their operations. The Indiana growers also provided a firsthand crop report to the customers, giving them an inside look at the quality of U.S. commodities.

The Council has been active in promoting DDGS in Southeast Mexico for many years.

At its height, DDGS enters Mexico in bulk at 8,000-10,000 metric tons (MT) per month. From there, it is distributed to the feed industry, including major layer and broiler groups and commercial feed producers. In the last seven years, the Council has partnered with distributers who are capable of moving product into the rural ranching communities, delivering the product in bags so logistics are less of a constraint.

“As we were there, signing the MOU with AGRANS, they told us the equipment is already helping increase sales by lowering bagging costs and reaching new customers. It is a low budget investment that can help make a difference with our partners marketing DDGS,” said Javier Chavez, USGC marketing specialist in Mexico.

The Council estimates an annual average return on investment of $1,775 for the first five years of this bagging project.

The organization will host support programs after installation and nutritional seminars to help ensure AGRANS customers understand how to best use DDGS. These programs are meant to leverage capital investment by working to maximize inclusion rates and provide value back to U.S. agriculture and its farmers.

“We need to be creative to find ways to enable business in the region and make this type of investment while our partners also show a commitment to our farmers,” Chavez said.

Record DDGS Exports To Ecuador, Colombia, Jamaica

Three Latin American (LTA) countries purchased record amounts of U.S. distiller’s dried grains with solubles (DDGS) in the 2021/2022 marketing year (MY): Colombia, Ecuador and Jamaica.

“One of the main focus for the Latin America office is to promote DDGS among current and potential end-users in the region to help increase exports to reach a higher portion of the estimated market potential. In Colombia, the largest end-users and importers are the commercial feed producers. However, their consumption can still increase. Therefore, those companies continue participating in programs that aim for higher inclusion rates. At the same time, efforts continue to create awareness and better understanding of DDGS among the potential feed, poultry and livestock producers that have not used them,” said Ana Ballesteros, LTA marketing director.

“In Ecuador, were the Council has promoted DDGS since 2016, the aquaculture sector was the largest importer and end-user of DDGS in this marketing year. Their formulas could pay the higher cost of DDGS that was subject to a 12 percent VAT, while the poultry and pork producers were not. However, with the VAT exemption confirmed in February 2023, exports will continue to increase and consumption will again expand to other animal sectors that are comfortable using DDGS. In Jamaica, the Council did virtual consultations with the only importer of DDGS on the Island in 2021, that resulted in higher inclusion rates for poultry and pork formulas.”

Colombia, the tenth-largest market for U.S. DDGS in MY 2021/2022, totaled 295,000 metric tons (MT), or 12 million bushels in corn equivalent. Worth $91 million, Colombia’s DDGS purchases were up nearly 10 percent from MY 2020/2021.

Purchases from both Ecuador and Jamaica increased by about 56 percent between MY 2020/2021 and MY 2021/2022. Ecuador imported 91,950 MT, or four million bushels in corn equivalent, of U.S. DDGS, while Jamaica imported 25,936 MT, or one million bushels in corn equivalent.