High Priced Ethanol Byproduct DDGS Loses Share in US Hog Rations
- US livestock producers are switching feed rations. A popular feed ingredient, distiller’s dried grains with solubles (DDGS)—a byproduct of crushing corn to make ethanol—has gotten more costly as ethanol production has slumped. Now, a more economical choice is soy meal and corn, and producers have begun including more of these grains into their animal feed, especially in the hog sector. Driving DDGS prices higher is the ethanol market. Ethanol prices fell to a 13-year low in late November, hurting producer margins and causing production to fall, according to weekly US Energy Information Administration data. Ethanol stocks are currently at record levels for this week of the year and near all-time highs. Meanwhile, Iowa soy meal prices were trading in mid-December at the smallest premium to DDGS since 2012. Soy meal typically holds a premium to DDGS because it has higher protein content and more key amino acids.