Domestic Fuel

This morning the Export Exchange 2010 program got started in earnest with opening remarks from Tom Dorr, USGC President/CEO. He says we have nearly 500 attendees from 33 countries. The proceedings will be translated into 7 languages.

Tom says that the opportunity to trade across borders helps to improve lives. That opportunity needs to be done in a transparent way to ensure food security. This Export Exchange is a forum to show that that food security is possible due to the use of new technologies and trade as a means to provide proper nutrition and safe food and economic opportunity for all.

You can listen to Tom’s remarks here: Tom Dorr Remarks

Export Exchange 2010 Photo Album

The Export Exchange 2010 got off to an official and social start this evening with welcoming remarks from U.S. Grains Council President/CEO Tom Dorr (left) and Renewable Fuels Association President/CEO Bob Dinneen.

The conference is focused on connecting international buyers of DDGS and coarse grains with the U.S. market. I don’t know what the attendance totals are here but we had a full room for the welcoming reception. During the next couple days I’ll have interviews and presentations posted here from the event.

You can listen to Tom’s opening remarks here: Tom Dorr Remarks

You can listen to Bob’s opening remarks here: Bob Dinneen Remarks

I’m also posting into an online photo album: Export Exchange 2010 Photo Album

This edition of “The Ethanol Report” features comments from Renewable Fuels Association (RA) President and CEO Bob Dinneen and U.S. Grains Council (USGC) CEO and president Tom Dorr about promoting exports of the ethanol co-product distillers dried grains with solubles (DDGS).

The two organizations are working together on the upcoming “Export Exchange” conference that will focus on increasing U.S. exports of DDGS. “This is going to be an opportunity for two and a half days in which people can get together, meet with buyers, meet with producers, listen to nutritionists, analysts and others explain the value of how to use and how to access these products,” says Dorr.

Dinneen says exports are critical because the industry has already hit “a feed wall” when it comes to use of DDGS in the domestic livestock industry. “While domestic markets for DDGS continue to expand, quite frankly we’ve grown that market pretty rapidly over the last several years and the opportunity for continued expansion domestically are fewer and farther between.” That’s why RFA believes the conference is a must-attend event for ethanol producers. “Because DDG marketing is so important to the bottom line of an ethanol producer. About 40 percent of your feedstock costs can be recovered in the marketing of DDG,” Dinneen said.

The Export Exchange is being held October 6-8 at the Hyatt Regency McCormick Place Hotel in Chicago, Ill. More information and registration is available on-line here.

Listen to or download the Ethanol Report here: Export Exchange Ethanol Report

Distillers grains exports are hitting new highs.

Exports of the ethanol co-product distillers dried grains with solubles (DDGS) hit a new record in July of 886,300 metric tons – which is more than was exported in the entire year in 2004. Total exports this year so far are 4.95 million metric tons, getting close to the total last year of 5.65 million.

Geoff Cooper, VP of Research with the Renewable Fuels Association (RFA), says 2005 was really the first year that DDGS exports started to take off. “2005 was the first year that we exported more than one million metric tons and the growth has been very rapid since then,” Cooper said. This year, the U.S. ethanol industry is on pace to export 8.5 million metric tons of DDGS, or about 28% of expected total DDGS production.

One third of the nation’s ethanol production ends up as DDGS, a high quality animal feed which can be used for everything from cattle to fish, and livestock producers in other countries have been quick to see the advantages of feeding the protein rich product to their animals. Cooper says the U.S. Grains Council (USGC), along with other companies and organizations, have been promoting those advantages to help exports grow.

“Education is what’s going to sell your product,” said Cooper. “And we are seeing the fruits of that work in dramatically increased exports.”

The upcoming Export Exchange, co-sponsored by USGC and RFA, is an effort to continue that dramatic growth in DDGS exports. “That conference is meant to bring potential buyers of US distillers grains to the United States to have them learn as much as they can about the ethanol industry and the co-products that come out of the ethanol industry,” he said. “The goal is just to get them up to speed on distillers grains and open their eyes to the fact that it is a very economically option for them in terms of feeding their animals.”

The Export Exchange is being held October 6-8 at the Hyatt Regency McCormick Place Hotel in Chicago, Ill. More information and registration is available on-line here.

Listen to or download my interview with Geoff Cooper here: Geoff Cooper Interview

We hear a lot about the blend wall for ethanol in the United States market, but there’s also a wall that the ethanol co-product Dried Distillers Grains (DDGS) in hitting with the livestock industry.

“We’ve already run into a feed wall,” says Renewable Fuels Association (RFA) President and CEO Bob Dinneen. “While domestic markets for DDGS continue to expand, quite frankly we’ve grown that market pretty rapidly over the last several years and the opportunity for continued expansion domestically are fewer and farther between.”

So expanding export markets for DDGS is important for the U.S. ethanol industry, and that opportunity is substantial. “We are exporting more and more DDGS these days,” Dinneen says. “But more needs to be done to get suppliers and buyers together.”

And that is why RFA is working with the U.S. Grains Council on the 2010 Export Exchange in Chicago next month and why Dinneen believes it is a must-attend event for ethanol producers. “Because DDG marketing is so important to the bottom line of an ethanol producer. About 40 percent of your feedstock costs can be recovered in the marketing of DDG,” Dinneen said.

The Export Exchange is being held October 6-8 at the Hyatt Regency McCormick Place Hotel in Chicago, Ill. More information and registration is available on-line here.

Listen to Bob Dinneen’s interview about DDGS and the Export Exchange here: Bob Dinneen Interview

The U.S. agricultural exports picture continues to be a bright one thanks in part to more exports of the ethanol by-product dried distillers grains (DDGs).

In the latest USDA report on exports, the forecast for 2010 exports was increased to $107.5 billion, up $3 billion compared to the May estimate. Almost half of that gain was in the revised estimate for grain and feed exports – up $1.2 billion to $27.2 billion from the May forecast. Corn shipments are increased 1 million tons and $100 million, reflecting stronger shipments in recent months as demand for feed grains and feed products (especially DDGS) has been stronger than expected. “Agriculture is one of the few major sectors of the economy today that has a trade surplus, which we are now forecasting to be a little over $30 billion,” said Agriculture Secretary Tom Vilsack..

The forecast is even better for next year, up to $113 billion, very close to the record $115 in 2008, thanks to sharply higher unit values and volumes for wheat and corn, as well as increases in products like DDGs. “I think it’s an indication of the quality of what we’re producing, which I think has allowed us to aggressively market this product as sort of an offshoot of what’s taking place in the biofuels industry,” Vilsack said. “This is an untold and I think often under-appreciated aspect of our economy in terms of how productive American farmers are and how innovative we’ve become with what we grow and what we raise and how much more opportunity there is as we expand biofuel production, beginning to use other feedstocks. I think we’re just going to continue to see more and more of these kinds of opportunities, byproducts and co-products of the process being developed.”

Another reason for ethanol producers to attend the upcoming Export Exchange, sponsored by the US Grains Council and the Renewable Fuels Association, with the express purpose of getting buyers and sellers of DDGs in particular together. More than 170 international buyers of U.S. DDGS and coarse grains are scheduled to attend the event, including representatives from China, Japan, Taiwan, Korea and Vietnam – countries which have a major interest in DDGS. South Korea, Hong Kong, and Southeast Asia account for two thirds of the forecast increase in agricultural exports this year compared to May.

The upcoming Export Exchange 2010 is shaping up to be a must-attend event for anyone involved in the production of ethanol who also produces the co-product dried distillers grains with solubles (DDGS), which is becoming a major export commodity from the United States.

The Export Exchange, sponsored by the Renewable Fuels Association (RFA) and the U.S. Grains Council (USGC), features an array of international leaders in ag commerce, including Dr. Bob Thompson with the National Center for Food and Agricultural Policy and Gary Blumenthal, president and CEO of World Perspectives Inc.

Dr. Thompson is scheduled to deliver the keynote address on the first day of the conference to provide perspective and insight on the world supply and demand situation will give attendees a better understanding of the world market. Blumenthal’s remarks during the second day luncheon will focus specifically on the growing global demand for U.S. DDGS. “As long as global population continues to grow, the demand for meat, milk and eggs will increase, and subsequently the demand for livestock and thus for DDGS will climb as well,” Blumenthal says.

Other speakers at the event will include Jim Allwood of Informa Economics, Paul Bingham with IHS Global, RFA president Bob Dinneen and Dr. Erick Erickson with USGC.

More than 170 international buyers of U.S. DDGS and coarse grains are scheduled to attend the event, including representatives from China, Japan, Taiwan, Korea and Vietnam – countries which have a major interest in DDGS. The Export Exchange will be held Oct. 6-8, 2010, at the Hyatt Regency McCormick Place Hotel in Chicago. Registration is available on-line with a $100 discount for registrations received before September 4.