Undeveloped southern Mexico market opportunity for U.S. DDGS

U.S. efforts in region helping local producers improve cattle herds.

Selling 50 metric tons of U.S. dried distillers grains with solubles (DDGS) may seem minor, but Javier Chávez, U.S. Grains Council (USGC) Mexico marketing specialist, views these small sales to cattle and dairy producers in southeastern Mexico as the start of another big opportunity for U.S. feed grains.

DDGS is a well-known and frequently used feed source in northern Mexico, but it does not benefit from the same recognition in the southeastern region of the country. Instead, cattle and dairy operations both rely on grazing pasture to feed the region’s estimated 7 million cattle.

Chávez explained that this substantial market is largely undeveloped due a lack of knowledge about superior feeding practices and inefficient distribution of feed ingredients. There, available forage provides inadequate nutrition, resulting in poor body condition scores, insufficient daily weight increases, late pregnancies and very large calving intervals.

USGC identified the need in this area for higher-quality feed and an opportunity to create demand for U.S. DDGS. The council started conducting DDGS feeding trials in 2015 -- in coordination with consultants -- for calves, heifers and dairy cattle in the state of Chiapas, Mexico. The combination of good taste, nutritional value and digestibility of U.S. DDGS resulted in increased milk production, better body condition scores and improved fertility. For example, heifers fed U.S. DDGS could be bred to give birth at around two years of age, compared to the regional norm of three or four years.

“The improved fertility means one more calf and one more lactation in the life of a cow, which means a lot of extra money for the producer,” Chávez said. “Supplementing with DDGS means a tremendous savings of time and an increase in the profitability of the ranch.”

USGC presented the DDGS feeding trial results in a series of on-farm presentations. However, Chávez said he realized that the council needed to expand its work to suppliers since DDGS was not used in the region previously, so producers did not have existing relationships to make purchases following positive trial results.

“The main problem we had was that we presented the result, and producers were happy and convinced that they can be more efficient through supplementation with DDGS,” Chávez said. “Now, we are developing both ends of the market: end users and suppliers.”

As a result, this year’s presentations now include a DDGS distributor. Doing so at the most recent presentation in Chiapas resulted in 50 mt of sales on the day of and following the presentation. That small success is one USGC believes will continue to expand following additional DDGS feeding trials underway in Yucatan, Tabasco and Veracruz, Mexico.

“This win-win scenario for U.S. farmers and Mexican producers is built on a strong trading relationship that benefits from advantageous trade policy and robust market development,” USGC said, adding that trading preferences in the North American Free Trade Agreement (NAFTA) have incentivized the integration of logistics on both sides of the border, and the council's work in Mexico over the past 30 years has helped expand the use of U.S. grain products throughout the country.

“NAFTA helped us have U.S. DDGS available and accessible in this area,” Chávez said. “Without the trade agreement, it would be harder -- and more expensive -- to get U.S. DDGS to this market, with fewer suppliers willing to sell it.”

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