Ethanol Plant Closures Cause DDGS Supply Issues

August 15, 2012

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(Drovers Cattle Network) The 2012 drought is not only taking its toll on U.S. Midwest crop and livestock producers. Ethanol plants also are succumbing as high corn prices dry up their operating margins. Suspension of operations, along with reduced production at many plants, has reduced the supply of distillers’ dried grains with solubles (DDGS), a co-product of ethanol production widely-used in swine diets.
“High corn prices are not only affecting pork producers, but they are also causing ethanol plants to shut down or reduce ethanol and DDGS production due to negative profit margins,” says Dr. Jerry Shurson, professor of swine nutrition and management, University of Minnesota. “DDGS has typically been priced at 75 to 85 percent of the value of corn, making it a good alternative ingredient to reduce feed costs. Now it is being priced around 100 percent of the value of corn, making it less attractive.” READ MORE