We hear a lot about the blend wall for ethanol in the United States market, but there’s also a wall that the ethanol co-product Dried Distillers Grains (DDGS) in hitting with the livestock industry.
“We’ve already run into a feed wall,” says Renewable Fuels Association (RFA) President and CEO Bob Dinneen. “While domestic markets for DDGS continue to expand, quite frankly we’ve grown that market pretty rapidly over the last several years and the opportunity for continued expansion domestically are fewer and farther between.”
So expanding export markets for DDGS is important for the U.S. ethanol industry, and that opportunity is substantial. “We are exporting more and more DDGS these days,” Dinneen says. “But more needs to be done to get suppliers and buyers together.”
And that is why RFA is working with the U.S. Grains Council on the 2010 Export Exchange in Chicago next month and why Dinneen believes it is a must-attend event for ethanol producers. “Because DDG marketing is so important to the bottom line of an ethanol producer. About 40 percent of your feedstock costs can be recovered in the marketing of DDG,” Dinneen said.
The Export Exchange is being held October 6-8 at the Hyatt Regency McCormick Place Hotel in Chicago, Ill. More information and registration is available on-line here.
Listen to Bob Dinneen’s interview about DDGS and the Export Exchange here: Bob Dinneen Interview
Under the sale, BP acquires the Jennings, LA biofuel pilot plant and the demonstration facility, as well as the San Diego R&D facilities. BP also receives Vereniums cellulosic biofuels and enzyme technologies and related IP. Verenium retains its commercial enzyme business, including its biofuels enzymes products and has the right to develop its own lignocellulosic enzyme program. Verenium will also retain select R&D capabilities, as well as rights to access select biofuels technology developed by BP using the technology it is acquiring from Verenium through this agreement.
With the stock market continuing to flounder, these speculators are positioning themselves for another bull run on agricultural commodities and crossing their fingers that corn prices go higher. They’ve laid down their bets that the drought in Russia and flood-induced crop failures in Pakistan will leave the world short of grain and spur demand and prices for U.S. grains. As clearly demonstrated by the 2008 commodities bubble, supply-demand fundamentals take a back seat to frenzied speculation when this many trigger-happy gamblers are in the market. Don’t be surprised if even the slightest hints of higher demand for U.S. crops or lower-than-expected U.S. supply touches off speculative hysterics not seen since the spring and summer 2008. If a speculative rally on corn does come to pass this fall, let’s at least hope that the pundits recognize the role of speculators and avoid immediately jumping to the conclusion—as they did in 2008—that biofuels had anything to do with it.