DDGS Exports to China Returning to Normal

Exports of U.S. distillers dried grains with solubles (DDGS) are starting to return to normal levels, according to the latest numbers for March.

Patriot Renewable Fuels DDGsThe Renewable Fuels Association reports that exports of the animal feed ethanol co-product rose in March for the fourth consecutive month, at 923,515 metric tons (mt), up 15% from February, with half of those shipments going to China. Exports of DDGS to China have been increasing this year after falling off last year due to a biotech trait issue. If normal shipments to China resume on an ongoing basis, 2015 theoretically could see total exports reach the 11 million mt mark. Mexico, Canada, Vietnam, and Thailand account for most of the remaining global market.

U.S. exports of ethanol in March were down slightly from February at 83.8 million gallons (mg), but that still represents the third-highest monthly volume in the last 12 months. Brazil and Canada accounted for half of total U.S. ethanol exports in March, followed by Oman and South Korea. The Netherlands, Tunisia and Nigeria were other key destinations in March.

RFA Reports February Ethanol Export Record

The Renewable Fuels Association reports that U.S. ethanol exports reached a new record in February, based on an analysis of the latest government data.

RFANewlogoAccording to RFA Research Analyst Ann Lewis, U.S. exports of denatured and undenatured ethanol in February totaled 85.2 million gallons, up 24% from January, the highest February export volume on record. Year-to-date exports at 153.9 million gallons are in line with exports during the same period last year.

The biggest customer for U.S. ethanol remains Brazil, which received about one quarter (28%) of total U.S. ethanol exports in February, followed by India (20%), Canada (17%), and the United Arab Emirates (12%). The Philippines, South Korea, the Netherlands and Peru were other key destinations in February.

In addition, exports of the ethanol co-product distillers dried grains with solubles (DDGS) rose 13% to the highest monthly level in 5 months, as the Chinese market continues to recover. “However, exports to China remain at about half the level enjoyed prior to the market collapse,” said Lewis.

Recovery of China DDGS Market Continues

Patriot Renewable Fuels DDGsEthanol exports from the United States dropped in January and while distillers grains (DDGS) exports were also lower compared to December, the Chinese market for DDGS is showing recovery.

According to Renewable Fuels Association (RFA) vice president Geoff Cooper, U.S. ethanol producers exported 68.7 million gallons of ethanol in January, down 9% from December 2014 and the lowest since September 2014. However, “imports barely registered in January, with only 28,670 gallons coming in from Canada.”

On the DDGS side, exports totaled 708,861 metric tons in January, down 3% from December and still down 22% compared to a year ago. But the good news is that China was the top market for DDGS exports, receiving 24% of the total. Recovery of the Chinese market continues, as January exports to China were 35% above December levels and up dramatically from near zero in November.

USGC Helped Move DDGS Exports in 2014

usgc-winter-grayThe U.S. Grains Council (USGC) held its winter meeting last week in Costa Rica where more than 250 delegates met to take a look back at last year and assess export opportunities.

Chairman Ron Gray says one of big issues of 2014 was with the ethanol co-product distillers grains (DDGS) and China. “At the end of the year, our exports were one of the highest years for DDGS on record,” said Gray. “The Grains Council was instrumental in mitigating that process so that trade can continue.”

Gray, who is a farmer from Illinois, believes it’s important for producers to be involved in trade policy. “I think combines would be easier to fix than trade policy,” he said. “We try to address the next problem so we can keep trade moving.”

Gray says U.S. sorghum picked up some exports to China last year to pick up the slack caused by the biotech trait issue with corn, which allowed them to remain active in the market, but ultimately it’s the growing demand for corn that is benefiting farmers back home.

US Ethanol Exports Hit High, DDGS Drop in Nov.

RFANewlogoExports of U.S. ethanol hit a nearly three-year high, while shipments of dried distillers grains (DDGS) slipped in November of 2014. In a piece from Renewable Fuels Association (RFA) Senior Vice President Geoff Cooper, the biggest share of the 90.9 million gallons of ethanol, a 15 percent increase from just a month earlier, went to India and a couple of customers in the Western Hemisphere.

India was the top destination for U.S. product in November, receiving 27.6 mg, or 30% of total shipments. Canada and Brazil were other top customers for the month. Year-to-date exports through November stood at 760.2 mg, implying an annualized total for calendar year 2014 of 829.3 mg.

In a reversal from historical trends, shipments of undenatured fuel ethanol accounted for the majority of November exports. Undenatured fuel ethanol exports totaled 65.9 mg, an all-time monthly record and up 143% from October. India was the leading importer of undenatured product at 27.6 mg, followed by Brazil at 17.0 mg and South Korea at 6.1 mg. The volumes shipped to India and South Korea represented the largest-ever monthly volumes sent to those markets. The Philippines (5.4 mg) and Nigeria (3.3 mg) were other top destinations for undenatured fuel ethanol…

November exports of U.S. distillers dried grains (DDGS)—the animal feed co-product manufactured by dry mill ethanol plants—slid 19% from October to their lowest monthly level since March 2013. The decrease in November DDGS exports was reflective of the continued collapse of the Chinese market. Total DDGS exports for the month were 631,721 metric tons (mt), with Mexico (127,189 mt), Turkey (103,331 mt), and Canada (64,186 mt) again occupying the top three positions. After importing an average of 539,000 mt per month from March to August, China took in just 4,689 mt in November. Still, year-to-date DDGS exports stood at 10.59 million mt, meaning the U.S. achieved a new annual export record in 2014.

At the same time, U.S. ethanol imports hit a five-month high in November, but RFA officials say the numbers were still relatively low at just 4.9 million gallons. Year-to-date 2014 imports through November were just 72.4 million gallons, implying an annualized total of nearly 79.0 million gallons.

China Approves Imports of Biotech Corn

syngentaSyngenta announced today that it has received approval for the Agrisure Viptera® trait (event MIR162) from China’s regulatory authorities, formally granting import approval. The approval covers corn grain and processing byproducts, such as dried distillers grains (DDGs), for food and feed use.

The Agrisure Viptera® trait is a key component of Syngenta’s insect control solutions, offering growers protection against the broadest spectrum of above-ground corn pests and enabling significant crop yield gains. Agrisure Viptera® has been approved for cultivation in the USA since 2010 and has also been approved for cultivation in Argentina, Brazil, Canada, Colombia, Paraguay and Uruguay.

Syngenta originally submitted the import approval dossier to the Chinese authorities in March 2010. In addition to China, Agrisure Viptera® has been approved for import into Australia/New Zealand, Belarus, the European Union, Indonesia, Japan, Kazakhstan, Korea, Mexico, Philippines, Russia, South Africa, Taiwan and Vietnam.

China May Reopen Market for U.S. DDGs

distillers_grains_ Photo US Grains CouncilNews out this week that Chinese officials committed to Agriculture Secretary Vilsack that the ban on imports of U.S. distillers grains (DDGs) containing the MIR 162 trait will be dropped is being met with optimism by the ethanol industry.

“While we are still awaiting the official regulatory announcement from China regarding the approval of this policy, it is welcome news for America’s ethanol industry,” said Growth Energy CEO Tom Buis. “I would like to personally thank Secretary Vilsack for his leadership and steadfast commitment to ensuring a resolution to this issue. Additionally, the many hardworking professionals of the USDA and the USTR deserve praise for their dedicated work behind the scenes and for their persistence in working with their Chinese colleagues to re-establish market access for U.S. DDGs.”

“China has always been somewhat schizophrenic with our protein feed,” said Renewable Fuels Association (RFA) president and CEO Bob Dinneen in an interview today. “There are times when they desperately want it and can’t get enough of it, there are times when they will erect these mysterious trade barriers so that we can’t get our product in there … We think we may be getting through it now.”

According to the office of the U.S. Trade Representative
, one of the outcomes of the U.S.-China Joint Commission on Commerce and Trade meetings was in the area of agricultural exports related to biotechnology traits. “China announced that it would approve the importation of new biotechnology varieties of U.S. soybeans and corn ­… and also that it would pursue a regular dialogue with the United States focused on the benefits of the increased use of innovative technologies in agriculture, for both the United States and China.”

RFA Submits Comments on Animal Feed Rule

RFANewlogoThe Renewable Fuels Association (RFA) submitted comments to the Food and Drug Administration (FDA) yesterday on the supplemental rulemaking proposal outlining best practices for the regulation of animal food under the Food Safety Modernization Act (FSMA). The act outlines regulations for animal feed, which includes the ethanol co-product dried distillers grain.

RFA submitted comments earlier this year following the initial proposed rule noting that animal feed would be unnecessarily regulated in a similar fashion to human food. RFA praised the FDA for addressing this concern in its updated version, noting that the “revised CGMPs (current good manufacturing processes) in the supplemental proposed rule appear more applicable to the animal feed industry and appear to provide more flexibility for the wide variety of the animal feed facility processes covered.”

However, RFA raised concerns with additions to the rule that would implement “…product and environmental testing programs, supplier approval programs, and verification programs that were not in the initial proposed rule language.” The comments stress that an individual plant “…should be provided the flexibility to determine its own needs and compliance strategy.” RFA also noted that “If applied in a prescriptive and indiscriminate way, these programs can add unnecessary cost burdens and divert resources away from the effective practices that ethanol producers currently use to assure safe, high quality co-products.”

Read RFA comments here.

Export Exchange Tours Build Relationships

badger-visitMany of the international teams visiting the United States last week for the 2014 Export Exchange also participated in tours before and after the event to see ethanol plants and farms across the Midwest.

Badger State Ethanol in Wisconsin had the honor of hosting a team of buyers from the Kingdoms of Saudi Arabia and Jordan. The KSA/Jordan team included companies representing the major dairy and poultry companies and major importers of feed grains in both countries and have been buyers of DDGS in the last couple of years.

exex-bob-tomHeld every other year by the U.S. Grains Council (USGC) and the Renewable Fuels Association (RFA), Export Exchange brings together more than 200 international buyers with U.S. sellers of corn, sorghum, barley, distiller’s dried grains with solubles (DDGS), corn gluten meal and corn gluten feed. Over the course of three days of events and the pre- and post-tours, these individuals not only do business directly but also make connections to facilitate future sales.

“This year’s Export Exchange was a resounding success,” said RFA president Bob Dinneen, pictured here with USGC president Tom Sleight. “In addition to new business agreements, it is my hope that attendees from all across the world will return home with a better understanding of international grain markets, domestic supply and demand of DDGS and coarse grains, and the current political landscape.”

RFA Promoting Distillers Feed at Export Exchange

rfa-exex-2014The 2014 Export Exchange is continuing today in Seattle, Washington with representatives from more than 50 different countries in attendance to learn more about DDGS, the distillers feed product produced by U.S. ethanol plants.

The Renewable Fuels Association (RFA) is co-sponsor of the event with the U.S. Grains Council and RFA president and CEO Bob Dinneen says it’s because we produce a lot of distillers feed. “Our plants, if they were a single country, would be the fourth largest producer of corn equivalent feed, behind only the U.S., China and Brazil,” said Dinneen, who spoke at the event yesterday on agricultural policies and politics. Interview with RFA CEO Bob Dinneen at 2014 Export Exchange

rfa-cooper-exexRFA Senior Vice President Geoff Cooper spoke at the event on the supply and demand outlook for DDGS.

“We have ample supplies of distillers grains coming from the U.S. ethanol industry but the demand picture is somewhat murky,” said Cooper. “That murkiness has to do with trade barriers and interruptions in the global trade of distillers grains that we’re seeing.”

Cooper says the U.S. is expected to produce 36-37 million metric tons of DDGS in the current marketing year, but one of the biggest trade disruptions in the market is being created by China’s demand that shipments of distillers grains must be certified to be free of the MIR162 biotech corn trait. “That kind of certification is not possible,” said Cooper. “So, we expect exports to China to be significantly curtailed or even halted until this situation is resolved.”

Last year, half of the U.S. distillers grains exports went to China, but Cooper says there are other countries increasing imports. “We are seeing continued growth of distillers grains exports to other parts of Asia outside of China,” he said, adding that Mexico is increasing imports and countries such as Egypt and Turkey are also growing markets. Interview with RFA Senior VP Geoff Cooper at 2014 Export Exchange