USGC helps feed supplier start selling DDGS in southern Mexico

By U.S. Grains Council | February 25, 2020

Southern Mexico has a new supplier of U.S. dried distillers grains with solubles (DDGS), thanks the U.S. Grains Council’s (USGC’s) work to demonstrate why DDGS is a good fit for end-users in the region and to connect an interested company with U.S. exporters.

Promexa is a rice processing company located in the port of Veracruz. The company imports rice from the United States to Mexico through vessels originating in New Orleans and then sells its rice bran to poultry and cattle farmers nearby. In early 2019, the chief executive officer from the company contacted the Council’s Mexico staff with interest to buy and sell DDGS as a way to expand their feed ingredient offerings.

“The volumes of DDGS the company was interested in handling were an easy fit to include in combo shipments from the United States,” said Javier Chavez, USGC marketing specialist in Mexico. “Having experience importing rice from the United States and an existing customer base in the feeder cattle and poultry industries made the company a great contact to explore adding DDGS to their product line.”

Chavez responded by sending information from the USGC's "DDGS User Handbook," a list of U.S.-based DDGS suppliers who operate in Veracruz and – most importantly – the results of DDGS feeding trials conducted in the area.

The Council has conducted a series of successful feeding trials in southern Mexico in recent years. A key component of these programs is introducing future customers to suppliers, resulting in the development of increased capacity of end-users and encouraging more suppliers to start offering DDGS.

“Trial partners are finding that beef cattle fed DDGS have better average daily gains compared with commercial feed alone, and the cost per kilogram of grain was lower,” Chavez said. “These results demonstrate that DDGS is a key ingredient that can complement traditional production practices and improve overall farmer profitability at the same time.”

A salesman from Promexa attended some of these trial presentations to learn even more about DDGS and make new business connections for his company. USGC consultants in the region have worked directly with the company in the field to provide additional support as they started to market DDGS.

Mexico is already the largest buyer of U.S. DDGS – purchasing 2.02 million metric tons in the 2018/2019 marketing year, valued at nearly $416 million. Even with this large overall market, there is still significant untapped potential for DDGS, particularly in the southern part of Mexico. Coupled with expansions at the port of Veracruz, which will be one of the largest ports in Latin America when those projects are completed, the Council’s work with Promexa is well-timed to take advantage of these infrastructure improvements and new interest in DDGS from regional end-users.

By September 2019, Promexa had already imported its first 5,000 tons of U.S. DDGS, sold to poultry producers who had previously purchased rice bran. When Chavez met with the company to solidify cooperation on promoting DDGS, the company only had 650 tons of that original purchase left to sell. Promexa later purchased a second shipment of 5,000 tons.

Building on that success, Promexa formed a new company in December 2019 – Feed Derivatives and Grains (FDG) – which now markets U.S. DDGS, corn and soybean meal. The company is marketing a third shipment of 5,000 tons of U.S. DDGS purchased by Promexa in December 2019. The new venture is also working with the Council to further develop markets for U.S. DDGS to cattle and dairy producers in southern Mexico.

“The company was very interested in our work and understood how we could work together,” Chavez said. “Their foray into this market was very timely and the company is an ideal supplier for our promotion work in southern Mexico.”