Ethanol Blog

Hot Weather Contributes to DDG Price Decline

Cheryl Anderson
By  Cheryl Anderson , DTN Staff Reporter

Soaring temperatures and sweltering heat in many areas of the U.S. have contributed to a dip in distillers dried grains prices.

The DTN weekly spot price average fell another $3 per ton in the past week, from $138 per ton last week to $135 this week. This marks the fifth consecutive week the average has declined, falling $33 per ton in that time, from $168 per ton in mid-June to $135 this week. This is the lowest point the average has reached since the first week of May.

Of the 36 Midwestern locations DTN collects spot prices from, 16 locations reported spot prices decreased between $5 and $10 per ton since last week. Prices at 20 locations remained unchanged in the past week, and no price increases were reported.

Merchandisers told DTN that price decreases were partially attributed to the recent heat wave that has plagued the Midwest and the fact that animals don't eat as much when they are overheated. That has caused a slight dip in demand.

Another major factor is that corn futures have continued to trend lower, along with prices of soybean meal. Both compete with DDG as a protein source in livestock rations.

Exports remain steady, merchandisers reported, with strong demand from the container side, as container freight rates are reasonably cheap right now. U.S. DDGS remained competitive in the world market from a protein standpoint.

Some hesitation remains however, as some foreign buyers may be waiting to see how low prices are going to go. Also, Chinese buyers seem to be hesitant, awaiting the outcomes of China's DDG anti-dumping investigation and possible high tariffs.

The value of DDG relative to corn this week rose considerably, from about 107% last week to about 113% this week, even though DDG prices fell. It may be that DDG prices are not falling quite as quickly as corn. The value of DDG relative to soybean meal also rose, but much less dramatically, from about 36% last week to about 38% this week.

The cost per unit of protein for DDG was about $5.40 this week, compared to the cost per unit of protein for soybean meal at $7.42.

Cheryl Anderson can be reached at



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