Canada’s Imports of U.S. Ethanol Co-Product Continue Upward
October 15, 2009
(AP) Canada is currently the second-largest importer of U.S. distiller’s dried grains with solubles (DDGS), a co-product of U.S. ethanol production. In 2008, Canada imported 772,000 metric tons of U.S. DDGS, up 453,000 tons from 2007. Imports are projected to reach 886,000 tons this year. The primary outlet for this feed ingredient has been Canada’s swine industry. The U.S. Grains Council has been front and center in promoting the co-product in the swine sector.
Recently, the Council has also embarked on initiatives to expand the inclusion of DDGS in Canada’s beef cattle industry. In order to make that happen, the Council works directly with Canada’s largest distiller’s grains importer, Rycom Trading Ltd., to educate Canadian feedlot operators on the nutrient value and ration formulation. “Rycom is a trusted company in Canada and often sets the trends that other suppliers follow. On top of that, the leading feedlot operators trust Rycom as a reliable supplier and rely on the company to assist them in making good decisions,” said USGC Consultant in Canada Neil Campbell. “By working with Rycom to ensure the accurate information about the value of incorporating U.S. distiller’s grains is getting to Canadian cattle growers, we are able to give U.S. farmers and the U.S. ethanol industry a competitive advantage against other alternative feed ingredients that offer less nutritional value.”
Campbell said one of the largest feedlots in Canada recently purchased approximately 8,100 tons of U.S. DDGS from Rycom to be delivered starting in October through December. Ryan Slozka, senior trader at Rycom, said the only barrier in increasing DDGS usage is a lack of familiarity with the product. “The key to success is to ensure beef producers don’t have bad experiences with DDGS,” said Slozka. “If they use it right, I am confident they will continue to include the ingredient in their rations. As a result, we will see U.S. DDGS imports continue upward.” Rycom also tendered 115 cars (approximately 10,000 tons) of U.S. DDGS per month for August and November.
Overall potential for DDGS in Canada’s beef sector depends on the inclusion rate of DDGS, according to Campbell. “Most of Canada’s beef feedlot production is in Alberta. If we elevate inclusion rates of U.S. DDGS to 20 percent in Alberta, we are looking at export potential around 570,000 tons,” he said. “If that increases to 30 percent, we are now talking about the possibility of 856,000 tons of U.S. DDGS in Alberta’s beef feedlot sector.” Campbell said the Council is currently working on securing funding to conduct a feeding demonstration to move Canada’s beef industry’s current 15 percent to 25 percent average DDGS inclusion rates to 30 percent to 40 percent.