DTN Weekly Distillers Grains Update

Grains Council to Head Industry Response to China Anti-Dumping Investigation

OMAHA (DTN) -- The U.S. Grains Council and members of the ethanol industry said this week they stand ready to mount a cooperative defense against an anti-dumping investigation against U.S. dried distillers grains exports to China.

China's Ministry of Commerce on Tuesday announced it has initiated anti-dumping and countervailing duty investigations of U.S. dried distillers grains with solubles exports to China.

U.S. Grains Council President and Chief Executive Officer Thomas N. Sleight said the council was disappointed to see the initiation of the investigation. He called the allegations by Chinese petitioners "unwarranted and unhelpful," and said the investigation could have negative effects on U.S. ethanol and DDGS producers, as well as Chinese consumers, for many years.

The basis of the investigation is that China's Ministry of Commerce will be studying whether U.S. agricultural policies in some ways create unfair competition. Sleight added that there is a long list of U.S. ag programs that China will be investigating to see if they are trade distorting.

According to a formal declaration from China's MOC, the investigation will focus on the subsidies of U.S.-produced distillers dried grains with or without solubles (DDGS). The document shows that the Ministry of Commerce consulted with the China Alcoholic Drinks Association and contains a list of more than 42 U.S. subsidy programs that allegedly increased U.S. DDGS exports and harmed local industries.

At the top of the list is the U.S. crop insurance program, something Sleight said is categorized as an "Amber Box" by the World Trade Organization and is not considered trade distorting. The WTO identifies subsidies by boxes given colors of traffic lights: green (permitted), amber (slow down/be reduced), red (forbidden). Amber box support measures are those which support prices or subsidies related to production quantities and are subject to limits.

Sleight added that some of the U.S. ag programs on the list for the investigation do not exist any longer.

The time period for the subsidies in question is from Oct. 1, 2014, to Sept. 30, 2015. The investigation will be completed on Jan. 12, 2017, but could be extended to July 12, 2017, if the government feels it needs more time.


Since 2010, China has consistently made demands and allegations against the U.S. that have resulted in trade disruption and turmoil.

China's first DDGS anti-dumping investigation against the U.S. in 2010-2011 was announced on Dec. 28, 2010, when four Chinese ethanol producers claimed the U.S. dumped its DDGS into Chinese markets cheaper than they could produce it domestically. Chinese importers immediately suspended all purchases of U.S. DDGS, and the Grains Council coordinated an industry-wide registration process for U.S. companies.

Although DDGS trade with China did not come to a complete standstill, the sudden shutdown of the Chinese DDGS market was a tremendous loss for U.S. ethanol producers, as China is the largest buyer of U.S. DDGS. The investigation was later dropped in mid-2012.

Since the 2010-11 anti-dumping investigation, trade with China continued to be volatile.

Much of 2014 was spent in trade issues with China when its government began rejecting shipments of U.S. corn and DDGS that contained the Agrisure Viptera (MIR 162) biotech trait produced by Syngenta Ag. The move brought exports of DDGS to China to a halt, causing a glut in supply and prices plummeting to the lowest levels in two years.

Much of 2014 was spent battling trade issues with China, first an announcement it would stop issuing permits for U.S.-produced DDGS that caused prices to take a nosedive, then an unsuccessful demand by China that all U.S. DDGS shipments be certified as MIR 162-free.

China finally approved the MIR 162 trait in December 2014. Although trade stabilized for some time, rumors of the new anti-dumping investigation began to surface in October 2015.


China has been a vital DDGS export market for the U.S. ethanol industry in recent years.

According to statistics from the USDA's Foreign Agricultural Service, in the first 11 months of 2015, China imported more than 6 million metric tons of DDGS at a value of $1.5 billion. Mexico was the second-largest buyer with about 1.5 tons of DDGS worth $315 million, followed by Vietnam with 594,000 tons at $141 million, South Korea with 533,000 tons at $119 million, and Canada with 446,000 tons at $83 million.

The history of trade volatility in recent years has left the industry wary, and resulted in a push to find new destinations for U.S. DDGS and efforts to expand existing markets. The announcement of China's decision Tuesday left the industry wondering what kind of market disruptions the investigation will cause this time around.

Those efforts have left the industry in a better position to deal with the latest crisis.

Sleight said the U.S. is better prepared for the anti-dumping investigation, as the industry has been anticipating this latest trade issue and has been working toward greater market diversification.

"The Grains Council has been working pretty vigorously for quite some time now to find alternative markets," he said. "There are a lot of buyers out there -- like Canada, Mexico, Japan, Korea and Southeast Asia -- who are poised to start buying. They know there is good product out there that is competitively priced."


"It's important to remember that the only thing that happened Tuesday is that China's Ministry of Commerce said they will begin the investigation," Sleight said. "That process will take at least six to eight months."

While Sleight said he expects trade with China to slow down, he believes DDGS exports to China will continue for the immediate future, at least for those shipments already on the books.

Still, Sleight said that investigation will likely cause some disruption in trade, something he finds unproductive.

"When you have this kind of disruption, it's not going to be good for anyone," he said. "Anti-dumping actions disrupt trade, and it's going to have negative repercussions. It's not in anyone's best interest."

The DTN Weekly DDGS Spot Price Average remained unchanged since last week at $126 per ton, a relatively low price compared to some highs seen in recent years caused by trade issues with China.

Most of merchandisers DTN contacted on Thursday said they have seen little reaction in the market to China's announcement. Some expected prices to drift a little lower in coming weeks, but from plants trying to catch up from the holidays and needing to bring in some new sales.

Andy Lindsay, territory sales manager at Poet Nutrition in Sioux Falls, South Dakota, said since the industry was expecting the news, the announcement had little effect on the market.

"I wouldn't expect too much out of it as far as any downward push to the market," Lindsay said. "I think everyone pretty much had it factored in."


The council stands ready to put together a cooperative defense to the investigation and organize the industry in response to the investigation, along with the ethanol/DDGS industry, merchandisers, etc.

Sleight said the council is confident that U.S. trading practices for DDGS, ethanol and all coarse grains and related products are fair throughout the world and that the council and its members will work vigorously in coming months to demonstrate the allegations being investigated are false.

"We stand ready to cooperate fully with these investigations and will be working closely with our members to coordinate the U.S. industry response," he said. "We will be answering all their questions, and I think the answers will hopefully put the issue to rest," he said. "But we're a long way away from that happening right now."

He said it will be especially important that the industry meet deadlines for the investigation.

"There are very specifically prescribed deadlines in these cases, so we want to make sure those deadlines are met, that the questionnaires are filled out and filled out well," Sleight said.

Cheryl Anderson can be reached at cheryl.anderson@dtn.com.



Use Distillers Grains to Supplement Rations for First-Calf Females

First-calf females often take more time and higher quality feed in order to become a productive future brood cow, according to an article by Paul C. Hay, University of Nebraska-Lincoln extension educator (http://bit.ly/…).

Especially vital in such a high-quality diet is the protein and energy needed by a first-calf female to prevent loss of weight and body condition between calving and breeding season. Such heifers should be managed carefully and fed separate from mature cows, as the younger cattle need more protein. Also important to note is the approximate 17% decrease in daily feed intake from first-calf heifers three weeks before calving, necessitating a higher nutrient density of the ration.

According to Hay, first-calf females post-calving need a diet with at least 62% total digestible nutrients (TDN) and 10-11% crude protein. Neither prairie hay, bromegrass hay or early-bloom alfalfa will meet the first-calf female's energy needs, and some will not meet their protein needs. Such forages need to be supplemented.

Corn, distillers grains, gluten feed and silage are all good choices to supplement protein requirements.

For cows on pasture, the supplement may need to be fed on the ground instead of in bunks. Although there is typically less waste when supplementing with an energy cube/cake or whole shell corn, UNL researchers saw little waste on the ground when supplementing with wet distillers grains.



COMPANY STATE 115/2016 1/8/2016 CHANGE
Bartlett and Company, Kansas City, MO (816-753-6300)
Missouri Dry $135 $135 $0
Modified $65 $65 $0
CHS, Minneapolis, MN (800-769-1066)
Illinois Dry $135 $130 $5
Indiana Dry $130 $130 $0
Iowa Dry $120 $120 $0
Michigan Dry $130 $130 $0
Minnesota Dry $115 $115 $0
North Dakota Dry $125 $115 $10
New York Dry $145 $142 $3
South Dakota Dry $120 $115 $5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $135 $135 $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $133 $133 $0
Iowa Dry $120 $118 $2
Michigan Dry $132 $132 $0
Minnesota Dry $115 $110 $5
Missouri Dry $135 $135 $0
Ohio Dry $135 $135 $0
South Dakota Dry $120 $118 $2
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $130 $130 $0
Wet $50 $50 $0
Illinois Dry $140 $140 $0
Nebraska Dry $130 $130 $0
Wet $50 $50 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $130 $130 $0
Indiana Dry $127 $130 -$3
Iowa Dry $120 $120 $0
Michigan Dry $130 $130 $0
Minnesota Dry $115 $115 $0
Nebraska Dry $130 $135 -$5
New York Dry $150 $150 $0
North Dakota Dry $130 $130 $0
Ohio Dry $130 $135 -$5
South Dakota Dry $115 $115 $0
Wisconsin Dry $120 $120 $0
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $125 $125 $0
Iowa Dry $120 $125 -$5
Minnesota Dry $115 $115 $0
Nebraska Dry $130 $135 -$5
Ohio Dry $135 $135 $0
South Dakota Dry $112 $115 -$3
Western Milling, Goshen, California (559-302-1074)
California Dry $190 $187 $3
*Prices listed per ton.
Weekly Average $126 $126 $0
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

*The spot prices gathered by DTN are only intended to reflect general market trends and may vary. Please contact individual plant or merchandiser for exact prices.

If you would be willing to take a weekly phone call and have your distiller grains spot prices listed in this feature, please contact Cheryl Anderson at (308) 224-1527 or (800) 369-7875, or e-mail cheryl.anderson@dtn.com.


Settlement Price: Quote Date Bushel Short Ton
Corn 1/7/2016 $3.5300 $126.07
Soybean Meal 1/7/2016 $266.20
DDG Weekly Average Spot Price $126.00
DDG Value Relative to: 12/25 12/18 12/11
Corn 99.94% 93.46% 90.55%
Soybean Meal 47.33% 44.48% 44.49%
Cost Per Unit of Protein:
DDG $5.04 $5.00 $4.88
Soybean Meal $5.60 $5.92 $5.77
Corn and soybean prices taken from DTN Market Quotes. DDG
price represents the average spot price from Midwest
companies collected on Thursday afternoons. Soybean meal
cost per unit of protein is cost per ton divided by 47.5.
DDG cost per unit of protein is cost per ton divided by 25.




Dried Modified Wet
Iowa 115.00-125.00 50.00-63.00 34.00-40.00
Minnesota 115.00-120.00 58.00 33.00-40.00
Nebraska 123.00-146.00 62.00-75.00 48.00-55.00
South Dakota 115.00-124.00 62.00-66.50 39.00-40.00
Wisconsin 115.00-123.00 50.00-60.00 NQ
Eastern Corn Belt 125.00-140.00 57.00-62.00 NQ
Kansas 140.00-165.00 NQ 49.00-58.00
Northern Missouri 135.00-150.00 NQ 42.00-49.00
CIF NOLA 154.00-160.00
Pacific Northwest 175.00-182.00
California 176.00-188.00
Texas Border (metric ton) 195.00-210.00
Lethbridge AB 157.00
Chicago 140.00-145.00

Dried Distillers Grain: 10% Moisture

Modified Wet Distillers: 50-55% Moisture

Wet Distillers Grains: 65-70% Moisture


Distillers Dry Grains

  Rail to California Points         170.00-181.00    dn 15.00-14.00
  FOB Truck to California Points    180.00-187.00    dn 15.00-9.00


Offers for Distillers Dried Grains delivered in October by rail to feed mills in the Pacific Northwest were steady to 5.00 lower from 178.00-188.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were steady to 5.00 lower from 196.00-203.00.

*All prices quoted per ton unless otherwise noted.



Dry and Wet Mill, Co-products and Products Produced - United States

October 2015 - November 2015

Jan 4, 2016


Dry mill co-product production of distillers dried grains with solubles (DDGS) was 1.94 million tons during November 2015, down 1 percent from October 2015 but up 9 percent from November 2014. Distillers wet grains (DWG) 65 percent or more moisture was 1.13 million tons in November 2015, down 8 percent from October 2015 and down 17 percent from November 2014.

Wet mill corn gluten feed production was 322.7 thousand tons during November 2015, down 1 percent from October 2015 but up 9 percent from November 2014. Wet corn gluten feed 40 to 60 percent moisture was 289.2 thousand tons in November 2015, down 3 percent from October 2015 and down 9 percent from November 2014.

Co-products and Products Nov 2014 Oct 2015 Nov 2015
Dry Mill tons
Condensed distillers solubles (CDS-syrup) 132,236 143,025 124,855
Corn oil 107,190 127,938 130,938
Distillers dried grains (DDG) 419,028 438,027 413,019
Distillers dried grains with solubles (DDGS) 1,770,904 1,953,817 1,935,499
Modified distillers wet grains (DWG) <65% moisture 1,354,729 1,222,032 1,130,071
Modified distillers wet grains (DWG) 40-64% moisture 472,819 386,304 425,499
Wet Mill
Corn germ meal 66,384 62,784 67,645
Corn gluten feed 295,030 326,055 322,741
Corn gluten meal 89,593 83,213 84,505
Corn oil 40,980 48,676 53,597
Wet corn gluten feed 40-60% moisture 317,273 296,954 289,171




*Distillers Grains Technology Council


*National Corn Growers Association Corn Distillers Grains Brochure


*Iowa Corn


Nebraska Corn Board


*Renewable Fuels Association - Ethanol Co-Products


*American Coalition for Ethanol


*U.S. Grains Council


*South Dakota Corn Utilization Council


Government Sites

*Iowa Department of Agriculture and Land Stewardship/Office of Renewable Fuels & Coproducts


University Sites

*University of Minnesota - Distillers Grains By-Products in Livestock

and Poultry Feed


*University of Illinois - Illinois Livestock Integrated Focus Team Distillers Grains site


*University of Nebraska - Beef Cattle Production By-Product Feeds site


*University of Nebraska Extension


*Iowa Beef Center - Iowa State University


*University of Missouri - Byproducts Resource Page


*South Dakota State University - Dairy Science Department - Dairy cattle research


(select "Distillers Grains" from the topic menu)

*Purdue University Renewable Energy Web Site


(select "Biofuels Co-Products from the menu)



If you are sponsoring or know of any event, conference or workshop on distillers grains, and would like to list it in the DTN Weekly Distillers Grains Update, please contact Cheryl Anderson (see contact info below).


We welcome any comments/suggestions for this feature. Please let us know what information is valuable to you that we could include in the Distillers Grains Weekly Update. Please feel free to contact Cheryl Anderson at (402) 364-2183, or e-mail cheryl.anderson@dtn.com.