October 12, 2020

Brazil's higher DDG output in 2020 to help lower feed cost

Production of dry grains by distillation (DDG) will grow by more than 60% in Brazil this year, benefiting meatpackers looking for cheaper feed alternatives, an industry group told Reuters.

According to the National Corn Ethanol Union (UNEM), DDG production is expected to reach about two million tonnes in 2020, up from 1.2 million tonnes in 2019 as more corn-ethanol plants in Brazil go on stream.

DDG is an alternative to corn and soymeal in poultry, swine and cattle feed.

"DDG can be a substitute for soybean meal despite having lower protein levels," says UNEM president Guilherme Nolasco. "It is more affordable too."

According to market consultancy Scot Consultoria, in the second half of September the average price of a tonne of soymeal in Mato Grosso, Brazil's biggest farm state, was 2,000 reais (~US$361.73; US$1 = 5.5290 reais) compared with 1,000 reais for DDG.

In terms of average gross protein content, soymeal has 48% while DDG 32%.

It is said that the expected increase in DDG production will help reduce costs for meatpackers at a time when corn and soybean prices are on the rise amid a drought at the start of Brazil's planting season.