USGC outreach encourages Mexican customer to reexamine US DDGS

By U.S. Grains Council | September 18, 2018

Reversing an overseas buyer’s single bad experience can be a challenge, but not an insurmountable one for the U.S. Grains Council. A recent trade team representing the Mexican company Granjas Carroll exposed key decision-makers to improvements in U.S. distillers dried grains with solubles (DDGS) production and use, paving the way for future potential sales.

“Granjas Carroll experimented with using U.S. DDGS a decade ago, but the company was not set up to properly handle the coproduct and had difficulty unloading the DDGS from the railcars they received,” said Ryan LeGrand, USGC director in Mexico. “As a result of these handling issues, the company decided to forgo using DDGS and the co-roduct has not worked on pricing terms since then.”

The Council kept in touch with the company as part of its wider engagement in Mexico, waiting for the right time and conditions to gauge interest in testing if U.S. DDGS would work in the company’s feed formulations. This year provided the right conditions for the company to reexamine that decision.

“A lot has changed in 10 years, especially with respect to how ethanol plants handle DDGS as far as watching the moisture and sugars and making sure the product has time to cool down before loading into rail cars,” LeGrand said. “Ethanol plants have made drastic improvements and Granjas Carroll has decided maybe it is time to take a look at DDGS again.”

To do so, the Council—in collaboration with Minnesota Corn and Iowa Corn—brought a small team from Granjas Carroll to those states this month to demonstrate the cost-saving and nutritional benefits of using U.S. DDGS and to see firsthand how the feed ingredient is produced, managed and utilized in the United States.

Team members represented different facets of the company—a buyer who could talk pricing options, a nutritionist key to understanding how to incorporate DDGS into swine rations and an operations manager who oversees the feed plant and is involved in the physical handling of the product.

“We had a really well-rounded team of decision-makers with us, which is very important to send the knowledge gained back to Mexico,” LeGrand said. “The main idea was to put the knowledge in their hands to make the best decision going forward.”

The team learned how to formulate DDGS by examining the metabolizable energy of DDGS, rather than looking at protein and fat content or color, and how doing so can bring additional value to swine feeding operations.

The team also met with marketers that provided logistics and storage solutions that could help the company receive a consistent product, central to their evaluation of whether or not to include DDGS in their rations. Additionally, the team toured several ethanol plants to see the different types of DDGS produced in the United States as well as swine operations to understand how DDGS is incorporated into their feed mixes.

“Now that they are home in Mexico, team members are going to continue to talk to suppliers, put the knowledge they gained in the United States to work and see if U.S. DDGS works for their rations,” LeGrand said. “The Council will be there to provide additional information, supplier contacts and anything else they need as they move forward.”

Mexico was the top buyer of U.S. DDGS in the 2016/2017 marketing year, setting a new record at 2.06 million metric tons. Thus far this year, Mexico has imported 1.76 MMT of U.S. DDGS, a 4.2 increase year-over-year. Granjas Carroll would add even more potential demand to that total in coming years, projected to potentially use between 60,000 and 100,000 MT of U.S. DDGS each year, depending on inclusion rates.

“Mexico is a very mature market for DDGS, taking record amounts of tons every year,” LeGrand said. “Now the Council is looking for pockets of demand around the country that are underserved or not using DDGS to find incremental demand increases, and Granjas Carroll is one such company with potential growth opportunity.”

Learn more about the Council’s work to promote U.S. DDGS in Mexico here.