Analysis: Alternative Feed Rations for DDGs

Planting Acerage Analysis 041720

USDA projections show a large corn crop of 97 million acres could be planted this year. However, a lot happens in a market influenced by COVID-19, crude oil and ethanol usage.

“There are a lot of moving parts,” says commodity analyst Matt Bennett. “A lot of usage for ethanol has gone to the waist side and probably will continue to for some time.”

Bennett thinks corn acres “will back off some” from the 97-million-acre projection. However, many ethanol plants have closed or idled production. Valero Energy may be the latest. Valero announced this week it has temporarily idled 8 of its ethanol plants and is reducing production at its remaining six ethanol plants.

Bennett says some livestock producers may switch dried distillers grains with corn for their feed rations. He says it’s one of the cheapest feed grains available.

“I can see feed usage getting pretty close to 6 billion if not more,” says Bennett. “Obviously, we are going to lose a pretty decent chunk of demand with corn usage for ethanol.”

Bennett also thinks exports could be pretty reasonable.

“I think exports are going to continue to stay strong,” says Bennett. “We are the cheapest corn in the world right now. Anybody who is looking for corn has got to be looking towards the United States, I would think.”

Bennett says the market will continue to evolve and change because 2020 is a different year.

Watch Bennett talk with Farm Journal editor and AgDay Host Clinton Griffiths during this analysis clip.