Canadian imports of dried distillers grains with solubles (DDGS) from the U.S. are starting to slow down as ample domestic feed supplies make importing the ethanol byproduct less attractive to Canadian livestock feeders.
U.S. ethanol producers exported 1.02 million tonnes of DDGS to Canada in the 2010 calendar year, according to U.S. government data released Friday. That compares with exports to Canada of 820,000 tonnes the previous year and represents a new record.
While increasing U.S. ethanol production will mean larger supplies of DDGS to export, the availability of competing feed ingredients in Western Canada may limit how much makes its way into Canada.
“DDGS are getting too expensive,” one Alberta-based feed grains broker said, pointing to the ample feed wheat and barley supplies in Western Canada.
The relatively expensive prices were causing feedlots to lower the percentage of DDGS in their rations to the 10 per cent level, from areas that had been as high as 30 per cent, he said.
Sean Broderick, DDGS marketing manager with major exporting company CHS Inc. in St. Paul, Minn., said Canadian imports of DDGS have fallen off over the past three or four months, compared to where they were a year ago.
Broderick echoed the ideas that ample Canadian feed supplies were limiting how much DDGS the U.S. was exporting to Canada. He said the larger movement to Canada in 2010 was tied to some non-traditional demand due to tighter feed supplies in Canada.
Canadian demand for U.S. DDGS going forward will depend on both the domestic feed situation, and the profitability of the livestock sector, said Broderick.