Eugene Chen, USGC technical program manager in Beijing, China contracted for future cooperative work in Council dairy programs with Guangdong Provincial Dairy Association, a non-profit organization comprised of dairy producers, milk processors and people from other dairy related institutes that purchases feed ingredients on behalf of its members, according to the USGC. USGC Beijing has also signed an agreement with the Shanghai Dairy Association and a similar agreement is in the works with Shanghai Provincial Dairy Association.

"These associations are located near or on the Chinese coastline, which provides tremendous market opportunity for the United States as transportation costs will allow U.S. distiller's dried grains with solubles (DDGS) to be a competitive feed ingredient in these dairy producing areas," Chen said.

The Guangdong Provincial Dairy Association Director Weikun Guan traveled to the United States in October 2008 to attend the council's International DDGS Conference in Indianapolis, Indiana, U.S. Since then, Guangdong Provincial Dairy Association bought around 700 tonnes of U.S. DDGS and distributed it to eight dairy farms for use in their feed rations, according to USGC. Guangdong Provincial Dairy Association recently purchased another 500 tonnes, scheduled to arrive in late April. Both purchases were done through a third party contact Guan met at the conference.

"Even though Guangdong is a small dairy producing province, the large-scale dairy farm production capabilities in the province are quite high," Chen said. "Eighty percent of the dairy farms average more than 100 head. The Guangdong Provincial Dairy Association will continue to import U.S. DDGS for dairy farms which are under its jurisdiction." Chen said.

USGC said China imported 8,500 tonnes of U.S. DDGS in 2008 and has imported roughly 4,400 tonnes so far this year.

"Competing feed ingredient prices along with Chinese policy factors will affect DDGS imports from the United States," said USGC Director in China Cary Sifferath. "The advantage of U.S. DDGS is its superior quality (better palatability and higher quality nutrients).

Cary Sifferath, USCG director in China, said competing feed ingredient prices and Chinese policy factors will affect DDGS imports from the U.S., However, the high quality and competitive price of U.S. DDGS in the Chinese costal area gives U.S. DDGS a competitive advantage.

"U.S. DDGS is becoming more and more competitive as the price of domestic grain increases and the governmental restriction on the amount of grain used for ethanol production within China," Sifferath said. "The disadvantages are the lack of the knowledge on DDGS use in animal feeding and ration formulation and related transportation and storage facility issues. This is why it is vital for the council to continue to conduct educational seminars for Chinese feedmillers, feed manufacturers and farmers."

Source:  USGC, March 27, 2009