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Distiller's Dried Grains with Solubles (DDGS) Feed Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

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  • 159 Pages
  • August 2022
  • Region: Global
  • Mordor Intelligence
  • ID: 4997465


  • CHS Nutrition Inc.
  • Crop Energies
  • Globus Spirits
  • Kent Nutrition Group
  • Land O' Lakes Inc.
  • Nugen Feeds and Foods
The distiller's dried grains with solubles (DDGS) feed market is projected to register a CAGR of 6.3% during the forecast period (2022-2027). The impact of ethanol production slowdowns on co-product production during the first wave of COVID-19 was stark. Since Nebraska is one of the nation’s leading producers of ethanol and distillers grains, second only to Iowa, the slowdown impacted the state. Despite the magnitude of the impact on the ethanol industry, distiller’s grain production has largely returned to pre-pandemic levels in recent months, indicating a resilient demand.

The DDGS feed market is growing due to its nutrient value, demand from the livestock industry, and the need for cost-effective nutrients. Distiller’s grains are an excellent energy source, often testing between 85% and 95% of total digestible nutrients (TDN). The form of energy also makes distiller’s grains attractive for grazing cattle. Since the starch is removed, the energy derived from the distiller’s grains is primarily digestible fiber and fat. Feed cost represents between 60% and 70% of the total production costs, which warrants the assessment of alternative feed ingredients in broiler diets. Distiller’s dried grains with solubles (DDGS) are an alternative ingredient, especially in poultry diets. Some of the major constraints of the DDGS market are lack of knowledge in some developing countries, price volatility of the grains, and ill effects of excess consumption. The United States had a major share of production and export with 44 million metric ton and 11 million metric ton, respectively, in 2021. Corn is the primary source of maize worldwide. Generally, corn condensed distillers solubles are added back to the coarse grains during the process to produce wet or dry distiller grains with solubles. The nutrient profile of corn condensed distiller solubles makes them a useful supplement for beef cattle fed low-quality forage diets. DDGS is primarily fed to beef cattle, dairy cattle, swine, and poultry.

Key Price of Corn Meal and Increase in Livestock Drive the Market

Increasing Demand from Livestock

One of the prime factors determining whether DDGS is an economical animal feed ingredient is the price and the availability of alternate options, like corn and soybean meal, as DDGS is a partial replacement of those alternate options. DDGS meal is more similar to corn in terms of nutritional value and price. DDGS in compound feeds for cattle influences the growth of milk yield and the fat and protein content in it. Countries with high prices of cornmeal may act as an ideal market for DDGS. The primary users of DDGS are the dairy and beef industries. Recently, the usage of DDGS in the swine industry began to increase dramatically and, to a lesser extent, in the poultry industry. According to the US Grains Council, adding 20-30% DDGS to a lactating cow diet results in milk production equal to or greater than when diets containing no DDGS are fed. Regions with high livestock production, such as the United States, have been witnessing demand for DDGS for the last few years. About 65.4% of US DDGS is consumed by beef cattle, 14.6% by dairy cows, 8.2% by swine, and 11.8% by poultry. The United States, China, and India are the largest producers of ruminant feed due to the presence of a large number of cattle and other ruminant populations in these countries. The demand for milk and meat is growing due to the increasing disposable incomes.

North America Dominates the DDGS Market

North America continues to have the largest market for corn-based distillers’ dried grains with solubles (DDGS). DDGS is a co-product of the distillery industries. The majority (98%) of the DDGS in North America comes from dry-grind plants that produce ethanol for the biofuel industry. The United States dominates the market due to the extensive biofuel production in the country. Over the last decade, ethanol production increased by 288%, from roughly 4.5 billion gallons to over 17 billion in 2018, driving the parallel expansion of the DDGS market. This growth can be attributed to the regulatory oversight of the US Food and Drug Administration, which ensures that ethanol plants comply with preventive control requirements as mandated by the Food Safety Modernization Act (FSMA). This federal rule requires facilities to follow hazard-free and safe manufacturing practices for animal food production. These preventive controls provide a formal assurance to buyers worldwide that American ethanol co-products continue to be safe feed ingredients. China dominated the world's DDGS market. Anti-dumping and countervailing duties forced purchases to trend downward from around 6.18 million ton to nearly 157,000 ton in 2018, over five years. Mexico is now the top buyer of US DDGS, which has been made possible by the North American Free Trade Agreement (NAFTA) through its market development measures and the trade interrelationships.

Competitive Landscape

The DDGS feed market is consolidated, with a few ethanol-producing companies accounting for most market share. The United States and Brazil are the major producers of DDGS, while most of the other countries are importing. Thus, the focus of the main players is on a cheaper transportation strategy. The major players in the DDGS feed market are Archer Daniels Midland Company, CHS Nutrition Inc., Globus Spirits, Kent Nutrition Group, and Land O' Lakes Inc. These major players are investing in new product launches and improvisations and acquisitions for business expansions. Another major area of investment is the focus on R&D to launch new products at lower prices.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
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  • CHS Nutrition Inc.
  • Crop Energies
  • Globus Spirits
  • Kent Nutrition Group
  • Land O' Lakes Inc.
  • Nugen Feeds and Foods

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.2 Market Drivers
4.3 Market Restraints
4.4 Porter's Five Forces Analysis
4.4.1 Bargaining Power of Suppliers
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Threat of New Entrants
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
5.1 Type
5.1.1 Corn
5.1.2 Wheat
5.1.3 Rice
5.1.4 Amino Acids
5.1.5 Blended Grains
5.1.6 Other Types
5.2 Animal Type
5.2.1 Dairy Cattle
5.2.2 Beef Cattle
5.2.3 Swine
5.2.4 Poultry
5.2.5 Other Animal Types
5.3 Geography
5.3.1 North America United States Canada Mexico Rest of North America
5.3.2 Europe Germany United Kingdom France Italy Spain Russia Rest of Europe
5.3.3 Asia-Pacific China Japan India Thailand Rest of Asia-Pacific
5.3.4 South America Brazil Argentina Rest of South America
5.3.5 Middle-East and Africa South Africa Rest of Middle-East and Africa
6.1 Most Adopted Strategies
6.2 Market Share Analysis
6.3 Company Profiles
6.3.1 Archer Daniels Midland Company
6.3.2 Globus Spirits
6.3.3 Nugen Feeds and Foods
6.3.4 Crop Energies
6.3.5 CHS Nutrition Inc.
6.3.6 Kent Nutrition Group
6.3.7 Land O' Lakes Inc.

A selection of companies mentioned in this report includes:

  • Archer Daniels Midland Company
  • Globus Spirits
  • Nugen Feeds and Foods
  • Crop Energies
  • CHS Nutrition Inc.
  • Kent Nutrition Group
  • Land O' Lakes Inc.