Canadian DDGS and barley mission finds new opportunity

Farm Forum

A U.S. Grains Council (USGC) team including a U.S. barley producer, ethanol plant manager and trader recently visited major feeders in Alberta, Canada, to search out expanded opportunities for U.S. distiller’s dried grains with solubles (DDGS) and feed barley.

“Canadian feeders are sophisticated and price sensitive,” said Neil Campbell, USGC consultant in Canada. “We’re always looking for an edge in logistics, and proximity to rail transloading facilities is a key. Constraints imposed by axle weight rules and the ability to originate return cargoes are also important.

“In addition, the changing oil content in DDGS over the last several years has created a need for ongoing feeding trials and buyer education about optimal inclusion rates. There is also current interest in U.S. feed barley, as Canadian stocks are very tight.”

In the first half of 2015, Canada edged narrowly ahead of China to reclaim its spot as the world’s leading importer of U.S. agricultural products. It currently ranks third globally as an importer of U.S. DDGS, with purchases of more than 275,000 metric tons from January 2015 to July 2015. Though Canada is a major barley producer, a tight market creates opportunities for opportunistic sales of U.S. feed barley as well.

“Our barley acreage and production in Montana is up, while Canadian acreage is down,” said Mike O’Hara of the Montana Wheat and Barley Committee, who participated in the Council mission. “The feedlots are looking for more supply. If we can work out the logistical challenges, there is interest on both sides of the border.”

While events in China, relaxing of relations with Cuba and ongoing negotiations on the Trans-Pacific Partnership (TPP) are dominating headlines, next-door neighbors Canada and Mexico are among the best customers for U.S. agricultural products year after year. The Council continues to work actively in both of these markets to find cost-saving solutions and locate new pockets of demand.