A short hour north of the Montana border, the U.S. Grains Council (USGC) is exploring the geographic advantage of unit trains carrying U.S. corn and distillers dried grains with solubles (DDGS) to Canadian feedlots around Lethbridge, Alb.
A trade mission in October crisscrossed the region, visiting cattle feedlots, feed manufacturers and rail facilities to find the best opportunities to expand inclusion of U.S. feed grains and co-products in local rations. According to USGC, the Canadian livestock feed demand is highly competitive, with many alternative energy and protein feed ingredients available for producers, but the U.S. is well-positioned to meet this need due to the close proximity to northern U.S. ethanol plants as well as the efficiency of transportation by unit train.
“There was a great buzz related to corn availability created during the trade mission,” said Gowans Feed Consulting general manager Neil Campbell, who works as a USGC consultant in Canada. “The timing is excellent to promote U.S. corn and DDGS in feedlot diets. The more corn that comes in, the more it will help the supply demand balance on feed grain.”
The first unit train of corn sold in the 2017-18 marketing year was delivered into Lethbridge the week before the recent mission, and due to market development work by the council and its Canadian consultants, more U.S. corn and DDGS will head north in the year to come.
Canada imported 670,000 metric tons (26.4 million bu.) of U.S. corn in 2016-17 as well as 735,000 tons of U.S. DDGS, a 13% year-over-year increase. While these sales made Canada the sixth-largest market for U.S. DDGS, Canada has the potential to utilize more than 4 million tons of DDGS annually, which the USGC is working to capture.
“In the Lethbridge area, U.S. corn can be railed directly into the region on unit trains,” USGC said. “Favorable pricing, combined with these logistical opportunities, promote inclusion into local feed rations. The council is working with other Alberta feedlots to support the development of additional trans-loading facilities in the region to further provide opportunities for rail shipments from the United States.”
USGC and Gowans Feed Consulting also developed a relative value calculator that demonstrates the continued advantages of including corn and DDGS into livestock rations, which USGC will use to further encourage local feedlots to evaluate the competitiveness of U.S. feed grains and co-products.
“This effort directly supports sales by increasing awareness of when buying opportunities arise,” the council said.