Work With Canadian Producers Spurs U.S. DDGS Sales
The U.S. Grains Council (USGC) is helping capture Canadian demand for quality feed ingredients by working with livestock producers one-on-one to demonstrate the continued advantages of U.S. distiller’s dried grains with solubles (DDGS).
“Western Canada is once again becoming an important market for U.S. DDGS,” said Marri Carrow Tejada, USGC regional director for the Western Hemisphere. “With increasing awareness and understanding of DDGS nutrient content and feeding strategies, more livestock producers are regularly feeding U.S. DDGS in addition to imports of U.S. corn.”
In March 2017, the Council traveled to Grenfell, Saskachewan, a little more than 100 miles north of the U.S.-Canadian border in North Dakota. There, the Council met with a large feedlot with capacity for 15,000 head of cattle, to discuss U.S. DDGS as part of a larger strategy focused on increasing inclusion rates and maintaining a reliable, consistent supply of U.S. DDGS into Canada.
The feedlot was feeding U.S. DDGS in addition to Canadian corn, but very conservatively. The Council reviewed the research data with the feedlot on feeding higher inclusion rates and the value of U.S. DDGS relative to corn and barley as well as and connected the company with U.S.-based grain suppliers and handlers.
After incrementally increasing inclusion rates, the feedlot is now feeding DDGS at a significantly higher inclusion rates, all sourced from the United States. In addition, the feedlot is now taking several deliveries of U.S. corn each week from North Dakota. The Council confirmed in July that feedlot operations are seeing improved performance and cost of gain within their operation, thanks to switching their feeding ration to include more U.S. feed grains and co-product.
This mutual success is the result of not only nutritional and economic value, but also the right conditions for logistics and price. The Canadian livestock industry has the potential to utilize more than four million metric tons of U.S. DDGS annually, but producers have many alternative energy and protein feed ingredients, making the marketplace highly competitive.
The United States is well-positioned to meet this demand. The terms of the North American Free Trade Agreement (NAFTA) dramatically increased trade and economic integration between the two countries, and Canadian livestock producers can access U.S. DDGS competitively due to close proximity to northern U.S. ethanol plants as well as the efficiency of transporting DDGS by rail or truck.
Canada currently ranks as the seventh largest market for U.S. DDGS this marketing year with more than 547,000 tons of U.S. DDGS purchased (September-June), an 18 percent increase year-over-year.
“Canada is a vital market due to its proximity to U.S. corn farms and ethanol plants,” Tejada said. “As we describe Canada as an opportunistic, price-driven market, communicating opportunities as they happen can trigger sales and establish longer-term preference for U.S. DDGS - a win-win scenario for both U.S. and Canadian agriculture.”
Learn more about the Council’s work in Canada here.