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Ethanol Byproduct Cuts Into Barley Bids

Imported Dried Distillers Grains with Solubles (DDGS) is increasingly displacing barley in the western Canadian feedlot sector, industry sources say.

The loss in barley’s cash value was seen continuing given that DDGS have now become part of a scheduled program by the feedlot industry. “The need to cover barley needs by end-users has been slowing disappearing due to the increased availability of alternative supplies, particularly DDGS,” said Bill Craddock, a local Manitoba producer and commodity trader.

A cash dealer, who did not want his name used agreed that DDGS use is up in Western Canada and that could be tied to the increased ethanol usage in the U. S. and which was confirmed by the USDA in a supply/ demand report Feb. 9.

“Feedlots as far away as northern Alberta have already incorporated DDGS into their program on a regular basis,” the dealer said. “It will never totally displace barley in the feed rations, but DDGS sure have cut significantly into barley’s feed ration share.”

Feedlots also do not have to cover their rations as far out as previously. The dealer noted that some feedlots at one point were covering supplies three to four months out. Now those same lots may be covered only a half to one month out due to the availability of DDGs and alternative supplies.

Adding to the depressed cash market in Western Canada is the continued decline in demand from the livestock sector, as the liquidation of both cattle and hog herds by producers remains strong, Craddock said.

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