Ethanol Blog

DDG Prices Spike Amid Short Supplies, Weather Issues

By Cheryl Anderson , DTN Staff Reporter

Between winter weather slowing transportation, increased demand and some tightness in supplies, prices of dried distillers grains spiked considerably this week, once again breaking the $200-per-ton mark.

The DTN weekly DDG spot price average rose $9 per ton in the past week, from $192 per ton last week to $201 per ton this week. This is the first time the average has surpassed $200 per ton since mid-December 2013.

Of the 30 Midwestern locations DTN collects spot prices from, 25 locations reported their prices had increased between $5 and $20 per ton in the past week. Prices at four locations remained unchanged since last week. No locations reported price decreases, while one location's price was not available.

Merchandisers told DTN snowstorms that have been plaguing most of the U.S. have caused problems with logistics. Ethanol plants have had to scale back production since railcars are having problems getting to plants. That lowered production of ethanol, in turn, resulting in lower DDG production.

That tightness in supply is causing problems in meeting increased feed demand from livestock producers who need extra feed to help animals survive freezing temperatures and winds. Some merchandisers reported being nearly sold out for February and March.

The value of DDG relative to corn rose nearly 3% in the past week, from 124% last week to 127% this week. The value of DDG relative to soybean meal remained mostly unchanged at about 45%.

The cost per unit of protein for DDG was about $8.04 this week, compared to the cost per unit of protein for soybean meal at $9.39.

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

(CZ)

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