Demand for DDGS in livestock diets

This past week I had an email asking for my thoughts on the future usage of DDGS in swine diets. This person has quite a few contacts in the grain and ethanol industry. The reason for his email was that it appears there is some concern about future usage rates of this co-product from the corn-based ethanol industry by US livestock producers.

 

As the feedlot industry continues to decline in size based on the number of cattle placements in feedlots and the on-going decline in the beef cow inventory, what will their long term usage rate of both wet and dry distillers grain look like? Is that market approaching a mature market usage rate?

 

One can ask the same questions about usage in the dairy industry. With the rapid collapse of milk and cheese prices the past 2 months, is the dairy industry at a stand-still in terms of growth? Has distiller grain usage plateaued in this industry?

 

In the swine industry, usage of DDGS (dried distillers grains with solubles) has skyrocketed in the past year. A majority of the growth was driven by high corn prices and relative availability of the product as new ethanol plants popped up seemingly in every corner of the corn belt.

 

The interest in usage of this co-product remains high. I just received the program for the Midwest Section of the American Society of Animal Science 2009 annual meeting scheduled for March 16-18 in Des Moines. There are several sessions of research abstracts scheduled dealing with use of this product in swine diets. Presenters will include graduate students and faculty from universities as well as swine production companies with private research sites and companies with enzymes and other additives to diets containing distillers grains.

 

One of the discussion points that many of the producers and production companies I work with bring up when we talk about use of DDGS in swine diets is the apparent improvement in overall gut health in their pig flows. There is very limited research data available to support a consistent claim of less enteric problems such as ulcers, etc. but I’m hearing about fewer death losses from ulcers, etc., even as we have decreased feed particle size. Some have even talked about adding a specification to their least-cost ration formulation program for grow-finish diets that specifies a minimum amount of DDGS. What the appropriate minimum amount should be is still open to discussion and research.

 

On the other hand, high inclusion levels, especially in late finishing diets, has been demonstrated to contribute to carcass quality issues. With bellies now a major contributor to total carcass value, anything that decreases their value is an immediate concern to packers.

 

When you put this all together, it appears that growth in the use of both wet and dry distillers grains in beef, dairy and swine diets will slow considerably in 2009. In the case of swine, there may be a new minimum demand as it relates to pig health, but there also appears to be a maximum demand until we resolve the carcass merit issues. At the same time, demand is an unknown for many of the new co-products that may be coming from some of the ethanol plants such as distillers grains that have the oil and/or other components removed at the ethanol plant.

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