DTN Weekly Distillers Grains Update

GIPSA Requests Public Comments on Services

OMAHA (DTN) -- To ensure its services meet market needs, the Grain Inspection, Packers and Stockyards Administration is requesting public comments, according to a notice published in the Federal Register on Tuesday.

In the notice, GIPSA asked how it can best facilitate the marketing of grains, oilseeds, rice pulses and related products, including distillers grains. Comments are requested as to the relevance of current standards, methods and grading practices, as well as on potential market needs for new standards or services.

GIPSA is the USDA agency that establishes standards for grains, oilseeds, rice pulses and related commodities in terms of kind, class, quality and condition. The division also defines commonly used industry terms and basic principles which govern the application of standards such as the type of sample used for a particular quality analysis, as well as specifying grades and grade requirements. These grade standards and inspection procedures allow buyers and sellers to communicate quality requirements, compare quality and assist in price discovery.

2007 REQUEST FOR PUBLIC COMMENTS

GIPSA periodically reviews standards to ensure they reflect marketplace needs. In 2007 it published an Advance Notice of Proposed Rulemaking (ANPR) seeking comments from the ethanol industry asking if GIPSA should offer any additional services to facilitate the marketing of ethanol co-products.

An official from the Federal Grain Inspection Service at GIPSA told DTN that when GIPSA ran the original ANPR a few years ago, the DDG industry was just getting off the ground.

At that time, the variability in DDG color alone was pretty striking -- an indication there were no real standards for color, as well as an indication of the moisture content.

The ANPR asked for comments on whether GIPSA should set standards for DDG products or standardize the test used to determine DDG characteristics.

GIPSA received a three-part reply. First, an overwhelming majority of responders felt GIPSA should not intervene in standardizing testing of ethanol inputs and outputs, and that industry participants were capable of standardizing DDG if that was the industry's decision. Part two indicated that GIPSA sought too much information and should instead prioritize requests. Lastly, Part 3 was that GIPSA should continue to approve rapid test kits for mycotoxins, making sure that only the best kits were approved by GIPSA. That has been GIPSA's focus for some time, the GIPSA official said.

The production of distillers grains in the U.S. has continued to grow along with ethanol production, increasing from 12.4 million metric tons of DDG in the 2006-07 crop year to an estimated 44.6 mmt in 2014-15.

In addition, the number and variety of co-products generated by ethanol plants have grown, as new fractionated products are being developed, such as high-protein DDG and reduced-fiber DDG.

"Since then, the industry has grown in leaps and bounds. We feel it is prudent to once again ask the industry if GIPSA can facilitate the marketing of DDG," the GIPSA official said.

COMMENT INFORMATION

GIPSA invites all comments, ideas and recommendations, but encourages comments specifically on the three following issues:

1. Are there any market-identified quality attributes that GIPSA does not currently describe (or provide testing) that would facilitate the marketing of grain, oilseeds, and related products?

2. What role should GIPSA take, if any, in standardizing the testing of inputs and outputs of ethanol co-product processing? Has anything changed in the marketing of ethanol and ethanol co-products since GIPSA's last ANPR in 2007 related to standardization, product description, or quality assessment?

3. Are there any other services that GIPSA could offer to facilitate the marketing of grain, oilseeds, or related products?

Specifically, GIPSA is soliciting comments from producers, handlers, processors, food manufacturers, exporters, importers, consumers, scientists, academicians, industry stakeholders, and other interested persons.

Comments must be received by GIPSA on or before April 18, 2016, and may be submitted in three ways:

1. By mail to: R. Dexter Thomas, GIPSA, USDA, 1400 Independence Avenue SW., Room 2530, Washington, DC 20250-3604.

2. By fax to: (202) 690-2173.

3. By Internet: at http://www.regulations.gov/… and follow the on-line instruction for submitting comments.

All comments should be identified as "U.S. Services Offered for Grains Notice Comments."

GIPSA stated that all comments will become a matter of public record, including name, address or any other personal identifying information voluntarily submitted.

All comments received will be posted to www.regulations.gov without change, and may also be viewed in the GIPSA office during regular business hours, however, an appointment with GIPSA is necessary by calling (202) 720-6529.

For further information on submitting comments, contact Anthony Goodeman at GIPSA, USDA, 1400 Independence Avenue SW., Washington, DC, 20250; Telephone (202)-720-0228; Fax Number (202) 720-1015; email Anthony.T.Goodeman@usda.gov.

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

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IN THE NEWS

Grain Council Mission Visits China, the Philippines

A recent mission of the U.S. Grains Council allowed U.S. farmers to learn about the perspective of customers in China and the Philippines, according to an article by the Grains Council (http://bit.ly/…).

The recent grain export mission was aimed at helping the team understand the challenges, opportunities and competition for U.S. grains in these two vital markets. The team visited such sites as ports, feedmills, trading houses and dairies to see the efforts of Grains Council in both countries, as well as sharing updates on U.S. crop production and planting decision for the upcoming growing season.

The mission started in China, which has been the top market for U.S. sorghum and dried distillers grains with solubles, as well as a major feed barley importer. However, China's potential purchasing is uncertain due to its policies and regulations. Most recently, China's imports of U.S. DDGS is hindered by its Ministry of Commerce's recent decision to launch an anti-dumping investigation against the U.S.

The team's visit to the Philippines focused on the potential market for ethanol and DDGS imports, assisted by the council's decade-long efforts to promote corn co-products.

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

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DTN WEEKLY DDG SPOT PRICES

CURRENT PREVIOUS
COMPANY STATE 1/29/2016 1/22/2016 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 $145 $135 $10
Indiana Dry $130 $130 $0
Iowa Dry $125 $120 $5
Michigan Dry $135 $130 $5
Minnesota Dry $115 $115 $0
North Dakota Dry $125 $125 $0
New York Dry $160 $145 $15
South Dakota Dry $125 $120 $5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
Kansas Dry $140 $135 $5
POET Nutrition, Sioux Falls, SD (888-327-8799)
Indiana Dry $138 $135 $3
Iowa Dry $125 $125 $0
Michigan Dry $128 $132 -$4
Minnesota Dry $121 $120 $1
Missouri Dry $141 $138 $3
Ohio Dry $136 $138 -$2
South Dakota Dry $120 $120 $0
United BioEnergy, Wichita, KS (316-616-3521)
Kansas Dry $130 $130 $0
Wet $50 $50 $0
Illinois Dry $145 $140 $5
Nebraska Dry $130 $130 $0
Wet $50 $50 $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
Illinois Dry $140 $130 $10
Indiana Dry $135 $127 $8
Iowa Dry $120 $120 $0
Michigan Dry $135 $130 $5
Minnesota Dry $120 $115 $5
Nebraska Dry $135 $130 $5
New York Dry $150 $150 $0
North Dakota Dry $130 $130 $0
Ohio Dry $137 $130 $7
South Dakota Dry $125 $120 $5
Wisconsin Dry $125 $120 $5
Valero Energy Corp., San Antonio, TX (402-727-5300)
Indiana Dry $130 $125 $5
Iowa Dry $125 $120 $5
Minnesota Dry $120 $115 $5
Nebraska Dry $135 $130 $5
Ohio Dry $140 $135 $5
South Dakota Dry $115 $112 $3
Western Milling, Goshen, California (559-302-1074)
California Dry $185 $185 $0
*Prices listed per ton.
Weekly Average $130 $127 $3
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.

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VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price: Quote Date Bushel Short Ton
Corn 1/28/2016 $3.6550 $130.54
Soybean Meal 1/28/2016 $266.90
DDG Weekly Average Spot Price $130.00
DDG Value Relative to: 1/29 1/22 1/15
Corn 99.59% 96.89% 98.55%
Soybean Meal 48.71% 46.66% 46.17%
Cost Per Unit of Protein:
DDG $5.20 $5.08 $5.04
Soybean Meal $5.62 $5.73 $5.75
Notes:
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.

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USDA MARKET NEWS/DISTILLER GRAINS PRICES

USDA WEEKLY DISTILLERS GRAINS SUMMARY (Jan. 22, 2016)

Dried Modified Wet
FOB PLANT PRICES PER TON
Iowa 120.00-127.00 50.00-65.00 34.00-40.00
Minnesota 112.00-120.00 58.00 33.00-40.00
Nebraska 123.00-145.00 60.00-78.00 49.00-55.00
South Dakota 115.00-130.00 62.00-69.00 39.00-40.00
Wisconsin 115.00-120.00 51.00-55.00 NQ
Eastern Corn Belt 125.00-140.00 62.00-67.00 NQ
Kansas 140.00-158.00 NQ 47.00-63.00
Northern Missouri 135.00-150.00 NQ 44.00-49.00
DELIVERED PRICES PER TON
CIF NOLA 154.00-163.00
Pacific Northwest 174.00-175.00
California 174.00-184.00
Texas Border (metric ton) 190.00-210.00
Lethbridge AB 152.00
Chicago 140.00-150.00

Dried Distillers Grain: 10% Moisture

Modified Wet Distillers: 50-55% Moisture

Wet Distillers Grains: 65-70% Moisture

CALIFORNIA WHOLESALE FEEDSTUFF PRICES (Tue Jan 26, 2016)

Distillers Dry Grains

  Rail to California Points            185.00-195.00    up 15.00-14.00
  FOB Truck to California Points       185.00-198.00    up 5.00-unch

PACIFIC NORTHWEST WEEKLY FEEDSTUFFS (Tue Jan 26, 2016)

Offers for Distillers Dried Grains delivered by rail to feed mills in the Pacific Northwest were steady to 1.00 higher from 178.00-185.00. Offers for distillers dried grains trans-loaded onto trucks and delivered to Willamette Valley dairies were steady to 1.00 higher from 196.00-200.00.

*All prices quoted per ton unless otherwise noted.

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NASS/USDA MONTHLY CO-PRODUCTS PRODUCTION

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

October 2015 - November 2015

Jan 4, 2016

Highlights:

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

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DDG LINKS/RESOURCES

Organizations

*Distillers Grains Technology Council

http://www.distillersgrains.org

*National Corn Growers Association Corn Distillers Grains Brochure

http://ncga.com/…

*Iowa Corn

http://www.iowacorn.org/…

Nebraska Corn Board

http://www.nebraskacorn.org/…

*Renewable Fuels Association - Ethanol Co-Products

http://www.ethanolrfa.org/…

*American Coalition for Ethanol

http://www.ethanol.org/…

*U.S. Grains Council

http://www.grains.org/…

*South Dakota Corn Utilization Council

http://www.drieddistillersgrains.com

Government Sites

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

http://www.distillersgrains.com

University Sites

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

and Poultry Feed

http://www.ddgs.umn.edu

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

http://ilift.traill.uiuc.edu/…

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

http://beef.unl.edu/…

*University of Nebraska Extension

http://ianrpubs.unl.edu/…

*Iowa Beef Center - Iowa State University

http://www.iowabeefcenter.org/…

*University of Missouri - Byproducts Resource Page

http://agebb.missouri.edu/…

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

http://dairysci.sdstate.edu/…

(select "Distillers Grains" from the topic menu)

*Purdue University Renewable Energy Web Site

http://www.extension.purdue.edu/…

(select "Biofuels Co-Products from the menu)

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DDG CONFERENCES

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).

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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.

(CZ/AG)

(CZ/AG)