January 19, 2018

DDGS Exports Set New Record To Southeast Asia

Considerable concern surrounded the export potential for U.S. distiller’s dried grains with solubles ( DDGS ) following an adverse trade policy decision by Vietnam, a historic top buyer, in December 2016. Instead, other countries in the region increased DDGS purchasing, the Vietnamese market re-opened and the region set a new record at 2.3 million metric tons in DDGS imports in 2016/2017.  “Offsetting the decline in sales to Vietnam, the market for U.S. DDGS in Southeast Asia diversified significantly,” said Manuel Sanchez, U.S. Grains Council (USGC) regional director for Southeast Asia. “We lost the largest DDGS market in the region for eight months and still reached a record import volume overall.” ddgs

Following the detection of quarantine pests, the Vietnamese Plant Protection Department (PPD) issued a decision in October 2016 to temporarily suspend DDGS importation. As a result, Vietnam purchased 50 percent less U.S. DDGS in 2016/2017 at nearly 495,000 tons, compared to almost 986,000 tons the year prior.

The Vietnamese government lifted its suspension of U.S. DDGS imports in September 2017, following an intense effort by the Council, the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) and the Office of the U.S. Trade Representative (USTR). Thus far in the 2017/2018 marketing year (September-November 2017), Vietnam has purchased more than 213,000 tons of U.S. DDGS, a steady uptick in the market.

Elsewhere in the region, the Council continued to expand DDGS sales by providing technical expertise and support as well as connecting grain buyers and end-users with U.S. suppliers. Programs in Vietnam are targeting aquaculture and swine programs whereas activities in Indonesia and Malaysia focus on boiler and layer sectors. In the Philippines, the Council is providing information on storing and handling.

This work throughout the region is helping end-users determine how best to incorporate U.S. DDGS into their rations. Combined with one of the lowest per unit of protein cost compared to other feed ingredients in the market, the Council saw notable increases in demand for U.S. DDGS from buyers in Southeast Asia in 2016/2017.

“We saw notable year-over-year growth in both Thailand and Indonesia,” said Sanchez. “New buyers like New Zealand, Cambodia and Myanmar also made a big splash this past marketing year.”

Thailand was the fourth largest buyer of U.S. DDGS in 2016/2017, purchasing 791,000 tons. Already in the new marketing year, Thailand has purchased more than 206,000 tons, bolstered by the Council’s trade servicing and technical assistance to the country’s feed manufacturers for swine, broilers and layers sectors, among the largest in the world.

“Thailand’s growth can be directly attributed to the Council’s programs in country,” Sanchez said. Indonesia has also steadily increased imports of U.S. DDGS over the three marketing years, importing about 512,000 tons in 2016/2017. Indonesia has already purchased more than 251,000 tons of U.S. DDGS in 2017/2018.

Smaller buyers are also substantially increasing their purchases of U.S. DDGS. New Zealand more than quadrupled purchases of U.S. DDGS with 151,000 tons in 2016/2017, compared to 32,600 tons the previous marketing year. New Zealand has already purchased 50,000 tons of U.S. DDGS in 2017/2018.

“Market potential for DDGS exports to the region remains optimistic in 2017/2018,” Sanchez said. “We expect demand for U.S. DDGS strengthen as industries in these countries continue to grow and incorporate more co-products into their rations.”

Learn more about the Council’s work in Southeast Asia here.

USGC Global Update

Midwest Farmers Assist With USGC Corn Harvest Quality Rollouts

The U.S. Grains Council is rolling out information on the quality of the 2017 corn crop to buyers and end-users around the world, aided in many cases by U.S. farmers who are sharing their own experiences growing new crop corn. quality

The annual series of events presents the results of the 2017/2018 Corn Harvest Quality Report, released this December. The presentations, meetings and conferences started as the new report became public and will continue through early 2018 to arm global customers with clear expectations regarding corn quality for this marketing year.

Farmers from Indiana, Iowa, Minnesota, Missouri, Nebraska, Ohio and Wisconsin are joining the Council overseas to provide their perspectives on the 2017 U.S. corn crop during events in Colombia, Mexico, Taiwan, Peru, Japan, South Korea and Tunisia. Attention to and participation in these events is growing, with new events being added in places like Mexico, where the rollouts occurred during two separate missions due to an increased level of interest in the quality information.

“The focus of the events may be the data, but the voices of those who produce the crop provide an important perspective on the data that customers are eager to hear,” said Deb Keller, USGC chairman and farmer from central Iowa. “By providing transparent information on new crop corn quality, the Council and these farmer participants help maintain a trusted relationship with our customers.”

The crop quality data and farmer presentations are accompanied by information on U.S. corn grading and handling. This information helps provide a better understanding of how U.S. corn is moved and handled through export channels for a varied audience of international grain buyers, end-users and even government officials.

These efforts to aggregate and share information on the corn crop each year could not be accomplished without the support of the Council’s membership,” Keller said. “We do what we can because of the support of U.S. farmers and agribusinesses.”

Recently-completed corn quality events in Colombia covered six cities and included participants representing major commercial feed producers, the country’s largest broiler producer, the largest layer producers and traders, government representatives, port authorities and private customs agencies. Crop quality presentations were also recently completed in Mexico, supported by farmer participants from Iowa and Indiana. Ongoing this week are events in Taiwan and Peru with farmer representation from Missouri, Ohio and Illinois, followed by events in Japan, South Korea and Tunisia featuring farmer participants from Iowa, Nebraska, Minnesota and Wisconsin.

The 2017/2018 Corn Harvest Quality Report is the seventh in the Council’s annual corn quality survey. The report revealed that the majority of 2017 corn crop conditions were rated as good or excellent during the growing season, leading to strong plant health, good kernel size and a projected record yield of 370.3 million metric tons (14.58 billion bushels), the second-largest crop on record.

The corn harvest quality report provides timely information about the quality of the current U.S. corn crop at harvest as it enters international merchandising channels. This information will be supplemented by a second report, the 2017/2018 Corn Export Cargo Quality Report, scheduled for early 2018, which will measure corn quality at export terminals at the point of loading for international shipment.

As a package, the reports provide reliable, timely and transparent information on the quality of U.S. corn as it moves through the export channel. It is important to recognize the final quality of corn in export channels is affected by many factors in the U.S. grain marketing system. As corn passes through the U.S. marketing system, it is mingled with corn from other locations; aggregated into trucks, barges and rail cars; and stored, loaded and unloaded several times.

“Presenting both the harvest quality report and the export quality report is very important, as they give export customers an understanding of the relationship between growing conditions, early harvest quality and export quality of U.S corn,” Keller said. “Our goal with these reports is to build confidence of our export customers in the availability and quality of U.S. corn, and to reaffirm the commitment of U.S. corn producers to their export customers.”

Learn more about the 2017/2018 Corn Harvest Quality Report here.

USGC Global Update

National Pork Producers Council Supports New Pork Inspection Model from USDA

 The U.S. Department of Agriculture has proposed a new pork processing inspection rule, a decision strongly supported by the National Pork Producers Council. As a result, the USDA’s Food Safety Inspection Service (FSIS) HACCP Inspection Model (HIMP) will be expanded from five current pilot locations to full-scale implementation.

“We support the USDA’s decision to advance HIMP as it introduces new pork production efficiencies while encouraging the deployment of new food safety technologies in packing plants,” said NPPC President Ken Maschhoff, a pork producer from Carlyle, Illinois. “The pilot program yielded very positive results; expanding the program is another step forward in the industry’s ongoing focus on continuous improvement of food safety and cost efficiency.”

The new inspection model, subject to a 60-day comment period, assigns increased inspection responsibility to plant operators, allowing the USDA to dedicate its resources to general oversight of food safety standards and the overall inspection process. Plants can choose to adopt the HIMP model or continue operating under the current inspection system.

Maschhoff added, “The U.S. pork industry is the most competitive in the world because we have built a reputation for quality, affordability and food safety. We applaud the USDA for taking this step to strengthen our competitive position.”

NPPC is the global voice for the U.S. pork industry, protecting the livelihoods of America’s 60,000 pork producers, who abide by ethical principles in caring for their animals, in protecting the environment and public health and in providing safe, wholesome, nutritious pork products to consumers worldwide. For more information, visit www.nppc.org.