USA: Explaining fluctuations in prices of distiller’s grains

Published 2022년 6월 8일

Tridge summary

This article explores the relationship between distiller’s dried grains (DDGs), a by-product of ethanol production, and corn and soybean meal prices in the U.S. from January 2007 to December 2021. It reveals a strong correlation between DDG and corn prices (0.824) and a moderate one with soybean meal prices (0.667). The prices of these feedstuffs have significantly influenced DDG prices, explaining 77.0% of the variation. The article also projects that DDG prices for the latter half of 2022 could range from $230 to $250 per ton, depending on corn and soybean meal prices.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Distiller’s dried grains (DDGs) are a co-product of dry-milled ethanol production. U.S. ethanol plants have the capacity to produce more than 17 billion gallons of ethanol and 35 million tons of DDG (Ag MRC). DDGs from corn contain, on average, 30 percent protein, 10 percent fat, and 7 percent fiber. Approximately 18 pounds of DDGs (10 percent moisture content) are produced from one bushel of corn. Because their protein content is higher than that of corn, DDGs can be substituted for corn and soybean meal in livestock diets. More information pertaining to the substitution of DDG for corn and soybean meal in the U.S. can be found in Hoffman and Baker (2011). Given the substitutability of DDGs for corn and soybean meal; we would expect DDG prices to be significantly related to these feedstuffs. To help explain fluctuations in DDG prices, this article examines the relationship between DDG prices, and corn and soybean meal prices. Price data used below were obtained from monthly ...

Source: Agfax