The increasing use of distillers grains provides livestock feeders with a protein packed source of feed that can replace high cost corn, wheat and soy alternatives. And with expanding demand for meat in foreign countries, the export market for distillers grains continues to grow. More than 4.5 million metric tons of distillers grains were exported in 2008, four times that shipped in 2006, and a 91 percent increase over 2007 export levels. Total U.S. distillers grains production in 2008 was approximately 22 million metric tons with exports accounting for roughly 20 percent.
For three consecutive years, Mexico was the leading market for U.S. distillers grains exports. Nearly 1.2 million metric tons, or 26 percent of total exports, were shipped to Mexico in 2008. Canada was the second-largest, followed by Turkey.
With bulk freight costs at historic lows, shipping companies have lowered prices on return trips of their containers, which in turn creates countless opportunities for DDGS. Although there is stiff competition in some foreign markets with wheat and soy meal, demand for DDGS increases if either has a bad year.
And looking forward, export markets are expected to continue to grow. Conservative estimates by the Food and Agricultural Policy Research Institute at Iowa State University in Ames project the U.S. ethanol industry will produce 43 million metric tons of DDGS during the 2013-14 market year, based on expected ethanol production of 16.8 billion gallons.