Distillers grains exports to China skyrocket

September 15, 2009

BY Kris Bevill

Report posted Sept. 30, 2009, at 4:18 p.m. CST

A drought experienced this year in China's major corn producing regions will result in fewer bushels per acre harvested this year, causing corn prices to climb and a substantial increase in the need for distillers dried grains with solubles from the U.S., according to the U.S. Grains Council.

Members of the Grains Council recently completed their yearly tour of China's corn-growing regions, and determined that the drought will result in lowered yields per bushel in 2009. "The drought really affected parts of China's major corn producing regions, especially in western parts of Jilan and Liaoning provinces and eastern parts of Inner Mongolia province," Cary Sifferath, USGC's senior director in China said. USGC members evaluated 300 corn fields in northeastern provinces of China and estimated the national corn yield for 2009 to be approximately 79 bushels per acre, compared to 88.5 bushels per acre predicted by the Chinese government in 2008.

Sifferath said the Chinese government's cap on production acreage means an increase in corn acreage to up production levels would have to equal a decrease in acreage for another crop. China does not appear to plan to import corn and prices for its own corn have become very expensive, which leads to an increased market for U.S. DDGS, he said. As a result, the USGC expects the U.S. to export up to 300,000 tons of DDGS to China this year - 18 times the amount exported to China in 2008. According to Sifferath, the substantial increase in exports to China has been experienced over a short amount of time and he expects increases to continue due to sustained high corn prices in China.

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