DDGS replaces 7.6 million acres corn, 5.86 million acres soy

By Susanne Retka Schill | December 29, 2011

Projected DDGS production for the current marketing year will come in slightly lower than the 2010-’11 marketing year just closed, according to a distillers grain balance sheet regularly updated by the Agricultural Marketing Resource Center at Iowa State University.

Using on USDA’s corn production numbers and projections, and assuming 17 pounds of DDGS produced per bushel of corn, the AgMRC shows DDGS production for the 2011-’12 marketing year could range from 42.29 million tons, on the low side of estimates, to a high of 42.50 million tons, as compared to the preliminary 2010-’11 figure of 42.67 tons. If realized, the slight decrease will follow several years of supply expansion. DDGS production of 25.92 million tons in 2007-’08 jumped 5.6 million tons to 31.53 million tons in 2008-’09 and 7.3 million tons to 38.83 for 2009-’10. The increase the following year was narrower, at 3.8 million tons.

Tracking supply and demand is the monthly task of the USDA, which the AgMRC uses as the basis for its regularly updated balance sheets, including corn and ethanol, soy biodiesel and soybean in addition to the distillers grains supply/demand sheets. 

The AgMRC “Estimated U.S. Dried Distillers Grains with Solubles (DDGS) Production & Use”  balance sheet  gives four years of historic data, including the preliminary numbers for the most recent marketing (which closed Aug. 31) plus numbers for the current marketing year and the next that reflect low, medium and high projections. 

Biofuels economist, Robert Wisner, built the balance sheet to show a number of other calculations. Besides estimating DDGS production by short tons, the sheet shows DDGS production by the bushels of corn equivalent, which for the year just closed is estimated at 1.162 billion bushels compared to a projected range of 1.157 to 1.166 billion bushels for the 2011-’12 marketing year. The chart also shows the estimated DDGS substituted for corn in bushels and tons for exports and, domestically, is broken out by the main feed sectors, dairy, beef, swine and poultry. The sheet also calculates  soybean meal replaced by DDGS, which for the 2010-’11 marketing year amounted to 6.2 million tons.

The DDGS balance sheet goes on to extrapolate the numbers to show the DDGS substitution by acres. The gross acres used for ethanol in 2010-’11 amounted to 32.9 million acres, while the DDGS substitution for corn would amount to 7.6 million acres, leaving a net harvested corn acres used for ethanol of 25.2 million acres, or 31 percent of the harvested acres of corn. On top of that the DDGS substitution for soybean meal is calculated at 5.86 million acres. Wisner notes that with a recovery to a trend yield next year, significantly fewer acres would be needed to produce the net bushels of corn needed for ethanol.

Wisner also built into the sheet the total biofuels usage for ethanol and soy biodiesel, which for 2010-’11 would be 29.5 million acres, or 19 percent of the corn and soybean acres used for biofuels production. With an anticipated growth in biodiesel production and below-trend corn and soybean yields, that estimate grows to 21 percent of corn and soybean acres that will be used for biofuels in the current marketing year, and is projected to stay the same, or even drop to 19 percent, for 2012-’13 in early projections. That compares to 15 percent of corn and soybean acres used for ethanol and biodiesel production in 2007-’08.

Wisner adds that when calculating the number of bushels of corn replaced by DDGS, many people simply divide pounds of DDGS by 56, the pounds of corn in a bushel.  However, the process used in the AgMRC balance sheet is much more complex. It takes into account variations in the corn replacement per pound of DDGS by species, trends in domestic and export market shares by species and percentages of DDGS exported over time. When a pound of DDGS is fed to beef cattle, it replaces more than one pound of corn. When fed to other species, it replaces less than a pound, but replaces some soybean meal.

To view the complete data and accompanying bar charts showing trends, click here. http://www.extension.iastate.edu/agdm/crops/outlook/dgsbalancesheet.pdf