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USGC Reaches Out to Bump Up DDGS Demand

by 5m Editor
27 March 2009, at 12:41pm

US - The United States Grains Council (USGC) vies to expand demand for U.S. feed grains and their co-products in China by working directly with Chinese industries.

According to the latest USGC update, Eugene Chen, USGC technical program manager in Beijing, contracted for future cooperative work in Council dairy programs with Guangdong Provincial Dairy Association, a non-profit organization comprised of dairy producers, milk processors and people from other dairy related institutes that purchases feed ingredients on behalf of its members. USGC Beijing has also signed an agreement with the Shanghai Dairy Association and a similar agreement is in the works with Shanghai Provincial Dairy Association.

"These associations are located near or on the Chinese coastline, which provides tremendous market opportunity for the United States as transportation costs will allow U.S. distiller's dried grains with solubles (DDGS) to be a competitive feed ingredient in these dairy producing areas," said Chen.

The Guangdong Provincial Dairy Association Director Weikun Guan traveled to the United States last October to attend the Council's International DDGS Conference in Indianapolis, Ind. Since then, Guangdong Provincial Dairy Association bought around 700 metric tons of U.S. DDGS and distributed it to eight dairy farms for use in their feed rations.

Guangdong Provincial Dairy Association recently purchased another 500 tons, scheduled to arrive in late April. Both purchases were done through a third party contact Guan met at the conference.

"Even though Guangdong is a small dairy producing province, the large-scale dairy farm production capabilities in the province are quite high. Eighty percent of the dairy farms average more than 100 head. The Guangdong Provincial Dairy Association will continue to import U.S. DDGS for dairy farms which are under its jurisdiction," said Chen.

In 2008, China imported 8,500 tons of U.S. DDGS and has imported roughly 4,400 tons so far this year. "Competing feed ingredient prices along with Chinese policy factors will affect DDGS imports from the United States," said USGC Director in China Cary Sifferath. "The advantage of U.S. DDGS is its superior quality (better palatability and higher quality nutrients).

Another good thing is the competitive price of U.S. DDGS in the Chinese costal area." U.S. DDGS is becoming more and more competitive as the price of domestic grains increases and the governmental restriction on the amount of grain used for ethanol production within China. "The disadvantages are the lack of the knowledge on DDGS use in animal feeding and ration formulation and related transportation and storage facility issues. This is why it is vital for the Council to continue to conduct educational seminars for Chinese feedmillers, feed manufacturers and farmers," said Sifferath.

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