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Market Issues and Prospects for U.S. Distillers’ Grains Supply, Use, and Price Relationships

by Linwood Hoffman and Allen Baker

Outlook No. (FDS-10k-01) 37 pp, December 2010

Growth in corn dry-mill ethanol production has surged in the past several years, simultaneously creating a coproduct—distillers’ grains (DDGS). Many in the U.S. feed industry were concerned about the size of this new feed source and whether it could be used entirely by the feed industry, but they also worried about the price discovery process for the product. The authors of this report provide a transparent methodology to estimate U.S. supply and consumption of DDGS. Potential domestic and export use of U.S. DDGS exceeds current production and is likely to exceed future production as ethanol production continues to grow. The authors identify the DDGS price discovery process along with the price relationships of distillers’ grains, corn, and soybean meal.

Keywords: Distillers’ dried grains with solubles (DDGS), dry-mill ethanol production, wet-mill ethanol production, feed use, exports, potential DDGS feed consumption, distillers’ grain price discovery, and distillers’ grain price relationships

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Last updated: Thursday, June 28, 2012

For more information contact: Linwood Hoffman and Allen Baker