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U.S. DDG prices at lowest levels in 10 years

The president of the U.S. Grains Council (USGC) says tariffs imposed by China are largely responsible for plummeting Dried Distillers Grains (DDG) prices.

Tom Sleight tells Brownfield Chinese anti-dumping and countervailing duties first introduced last September are squeezing U.S. DDG demand.

“That’s really had a huge impact in terms of it’s your number one market.  We’re still selling DDG’s into China, but it is by no means what it once was.”

DDG spot prices in the Midwest have fallen nearly 50 percent since peaking last June, to the lowest levels for this time of year in a decade.

Sleight says improving trade relations with China is central to solving U.S. DDG problems.

“I’ve often said the trade relationship between the U.S. and China is not at a peak right now, so it’s very important that meeting between President Trump and President Xi went well.  And it did.  I don’t think there’s anything startling that came out of it, but the agreement to work on this 100 day period…that’s putting some optimism back into the picture.”

Sleight says low prices in the U.S. are generating more interest from other markets, like Mexico, Korea and Japan.

He also points out unprecedented ethanol production has diminished the value of DDG’s, a byproduct of the renewable fuel.