Estimating the substitution of distillers' grains for corn and soybean meal in the U.S. feed complex

The growth potential for U.S. feed consumption of DDGS is expected to follow a similar trend, with beef cattle consuming the majority of DDGS, followed by dairy cattle, swine, and poultry.

Thursday 10 November 2011 (6 years 6 months 11 days ago)

Corn-based dry-mill ethanol production and that of its coproducts—notably distillers’ dried grains with solubles (DDGS)—has surged in the past several years. The U.S. feed industry has focused on the size of this new feed source and its impact on the U.S. feed market, particularly the degree that DDGS substitute for corn and soybean meal in livestock/poultry diets and reduce ethanol’s impact on the feed market. This study develops a method to estimate the potential use of U.S. DDGS and its substitutability for corn and soybean meal in U.S. feed rations. Findings demonstrate that, in aggregate (including major types of livestock/poultry), a metric ton of DDGS can replace, on average, 1.22 metric tons of feed consisting of corn and soybean meal in the United States. Over time, DDGS may substitute for less corn and more soybean meal as the share of beef cattle consumption of DDGS declines slightly (although increasing in absolute terms), with offsetting share increases in dairy cattle, swine, and poultry. Feed market impacts of increased corn use for ethanol are smaller than that indicated by the total amount of corn used for ethanol production because of DDGS.

The growth potential for U.S. feed consumption of DDGS is expected to follow a similar trend, with beef cattle consuming the majority of DDGS, followed by dairy cattle, swine, and poultry. Hogs ranked third with a market share of 6 percent in 2006/07, increasing to 10 percent in 2010/11, as inclusion rates rose along with research demonstrating DDGS potential in swine diets.

October 2011/ ERS-USDA/ USA.
http://www.ers.usda.gov/

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