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U.S. grain industry working hard to open Asian markets for ethanol byproduct

Updated:
SIOUX FALLS, S.D. (AP) The rapid expansion of the ethanol industry is being felt far from American shores. It's also helping boost Asian imports of distillers grain.

The U.S. Grains Council is working to expand markets for dried distillers grains with solubles, or DDGS, a byproduct of the alternative fuel used as high-protein livestock feed, in Japan, Taiwan, Vietnam and China, said Cary Sifferath, the council's Japan senior director.

"If we can find export markets for it, we can keep export prices up,'' Sifferath said recently by telephone from his office in Tokyo. "Most corn board members are very keen for us to keep working on that.''

When ethanol plants turn corn into fuel, the process uses only the starch, which is about 70 percent of the kernel. The protein, fiber and oils left behind are concentrated into distillers grain.

A 56-pound bushel of corn produces about 2.8 gallons of ethanol and 17 pounds of distillers grain, according to the American Coalition of Ethanol.

The wet distillers grain can be sold locally, but it can also can be dried to increase shelf life, allowing it to be shipped over longer distances.

Turning wet distillers grain into DDGS involves separating the liquid from the mash, partially dehydrating that liquid into a syrup and adding it back into grain.

Ethanol plants nationwide produced 9 million metric tons of distillers grain in 2005, a 23 percent increase from the 7.3 million metric tons produced during the previous year, according to the Renewable Fuels Association. With the huge increase in ethanol plants coming online, that number is expected to far surpass 10 million metric tons in 2006, industry experts said.

Most of the distillers grain exported from the U.S. in 2005 went to Ireland, Mexico, Spain, Canada and the United Kingdom, according to the USDA's Foreign Agricultural Service office.

Brian Jennings, executive vice president of the American Coalition of Ethanol, said the industry has traditionally focused less on finding markets for ethanol's byproduct than the corn-based fuel itself.

"But now the industry is very cognizant that distillers grains are a critical piece of the puzzle and they're working to do the research and development to make distillers grains more digestible and more acceptable to all livestock diets,'' he said. "So it's not just beef and dairy cattle, but there's also emphasis now on swine and on poultry.''

In Taiwan, rising feed ingredient prices are helping to increase that country's distillers grain imports, which are expected to reach 100,000 metric tons this year, more than 20,000 tons above what the U.S. Grains Council set as a target.

The council last month hosted more than 200 feed mill technicians, nutritionists, importers, livestock ranchers and poultry farmers for a seminar in central Taiwan, where the country's hog and poultry farmers are concentrated.

And some of the major players in China's feed market visited Minnesota and Illinois last month to learn more about using distillers grain in poultry and swine rations, said Todd Meyer, the Grain Council's senior director for China.

The group of Chinese ranchers and feed millers attended a DDGS course at the University of Minnesota, stopped by a grain elevator and loading facility, and met with various companies and marketing board members. Many of those visiting from China indicated they would use two to three times more distillers grain if the supplies were steadier, Meyer said.

In Japan, monthly DDGS imports shot up in April, with 7,073 metric tons coming into the country, 4,451 tons of which were sent by the United States. That's an increase of more than 800 percent from the previous year, according to the council.

Most of the DDGS imported into Japan will go to the egg and dairy industries, Sifferath said, but it's also being looked at as feed for hogs, poultry and cattle.

Japanese consumers prefer more fat in their meat, so the council has been conducting a swine feeding trial to determine what effect DDGS feed will have on pork fat content.
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