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U.S. Grains Council builds foreign markets for DDG"We have a product and we have potential feed demand," Miller said. By Doug Rich Exports are extremely important to the United States and its farmers. The agriculture industry in this country derived 27 percent of its gross receipts from foreign customers last year. That amounted to $70.9 billion from ag exports last year alone. Vic Miller, Chairman of the U.S. Grains Council, said we export 21 percent of our corn, 35 percent of our soybeans, and 48 percent of the wheat we grow in this country. "In the past our focus has been on just commodities, but that focus has changed," Miller said during a panel discussion on the value of ag exports during the Commodity Classic in Tampa, Fla. Although the U.S. Grains Council and other organizations are still working to develop markets for bulk commodities they are developing value added markets, as well. Specifically, they have been opening foreign markets for distillers dried grains (DDG) and polylactic acid (PLA). Ethanol production is the hot topic these days and nearly every one agrees that U.S. ethanol production will exceed the Renewable Fuels Standard every year. Miller said ethanol capacity in this country will reach 12.5 billion gallons by 2010 before it levels off at around 13.5 billion gallons after 2012. "As ethanol production increases so does the production of DDG," Miller said. According to ProExporter the U.S. will produce more than 30 billion metric tons of DDGS by 2015. The amount and type of DDG we produce will change with fractionation and efficiencies in the ethanol production stream. "But the point here is that we will have an abundance of DDG in the marketplace," Miller said. "Much of it will be absorbed domestically, but building foreign markets for this product will strengthen the long-term profitability of the ethanol industry and the U.S. corn grower." In addition to the growing usage of DDG by the feeding industry in this country, China, Mexico, and Canada have all had double digit increased in the DDG in recent years. "We have a product and we have potential feed demand," Miller said. The U.S. Grains Council is working to develop markets for this valuable CO-product by improving market access, educating users, and connecting buyers with sellers. Miller said a number of Free Trade Agreements (FTA) have been signed that allows the free movement of DDG into many regions. "Sometimes it is allowed into countries where our bulk corn is not welcome," Miller said. He pointed to the Philippines as a good example of this situation. The U.S. can ship DDG into this area without much trouble but it is very difficult to get corn into this market. Tariffs can affect market access also. Miller said U.S. Grain Council has had some influence on tariff rates that affect value added products like DDG. In Taiwan there is a 3 percent tariff on DDG but there is not competing product in the country that needs protection. Taiwan is working with U.S. Grains Council to reduce or eliminate this tariff. Feeding trials have been used to educate potential consumers about DDG by the U.S. Grains Council. Miller said consumers in these countries prefer to do their own feeding trails with their own animals under their own conditions. These feeding trials have been very useful. In feeding trials with tilapia fish in Japan the U.S. Grains Council showed that feeding DDG resulted in better growth rates, improved conversion rations, and reduced mortality rates. These rations contained up to 15 percent DDG. Japan did feeding trials with swine using DDG and there was no decrease in carcass quality. According to Miller the market share for DDG in Japan has risen from 20 percent in 2004 to 65 percent in 2006. "I know that Japan wants to increase their use of DDG," Miller said. Prior to marketing DDG the U.S Grains Council began building markets for consumer ready products with PLA. This product is used to make plastic biodegradable. "In 2005 Taiwan imported 4,300 metric tons of bio-plastic resins which is the equivalent of 425,000 bushels of corn," Miller said. "By 2009 resins imports by Taiwan are expected to increase to 50,000 metric tons which equivalent to 5 million bushels of corn." Japan has been a good market for PLA also. In 2005 Japan imported 15,000 tons of resins and this is expected to expand to 60,000 tons by 2009. "This is on top of 64,000 bushels of bulk commodity corn that already flows into that marketplace. "Through market access, education, and one on one meeting the U.S. Grains Council is gong to continue to build markets," Miller said. Doug Rich can be reached by phone at 785-749-5304 or by e-mail at richhpj@aol.com. B 1 3/19/07 6 Star Midwest Ag Date: 3/14/07
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