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Assessing China's Potential Import Demand for Distillers Dried Grain: Implications for Grain Trade

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Author Info

  • Jacinto F. Fabiosa
  • James Hansen
  • Holger Matthey
  • Suwen Pan
  • Francis Tuan

Abstract

A team of U.S. analysts visited China to assess the potential for use of distillers dried grain plus solubles (DDGS) in China's livestock sector. They examined the economics of the use of DDGS in feeds, the policy issues surrounding the use of the product, and transportation-logistic constraints in the expansion of DDGS imports. The team collected actual and secondary data to conduct a micro-economic analysis of the impact of DDGS on feed cost, solicited official and expert opinions through interviews, and conducted site visits. They found the development of the DDGS import market in China to be very promising. The microeconomic analysis showed a clear economic incentive for feed millers and livestock producers to use DDGS in their feed ration, with a potential savings of $1 per hundredweight of mixed feed, representing a 6% feed cost savings. Moreover, China has the livestock numbers to support a DDGS market. Concerns about myctoxin contamination and nutrient profile variability must be addressed, however. Clearly differentiating imported DDGS from domestic DDGS is key in positioning U.S. DDGS in the Chinese market. Also, a science-based, and pro-active approach is needed to address policy-induced barriers.

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Bibliographic Info

Paper provided by Center for Agricultural and Rural Development (CARD) at Iowa State University in its series Center for Agricultural and Rural Development (CARD) Publications with number 09-sr104.

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Date of creation: Dec 2009
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Handle: RePEc:ias:cpaper:09-sr104

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Keywords: DDGS; distillers grain; feed demand; livestock sector; optimal feed ration.;

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  1. Beghin, John C. & Dong, Fengxia & Elobeid, Amani E. & Fabiosa, Jacinto F. & Fuller, Frank H. & Hart, Chad E. & Kovacik, Karen & Matthey, Holger & Saak, Alexander E. & Tokgoz, Simla & Chavez, Eddie C. , 2004. "FAPRI 2004 U.S. and World Agricultural Outlook," Staff Reports 32046, Food and Agricultural Policy Research Institute (FAPRI).
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