Reduced Ethanol Output During Pandemic Cuts DDGS Supply

Reduced Ethanol Output During Pandemic Cuts DDGS Supply

 

DDGS – Iowa

DDGS prices have been trading well above average for this time of year.  The average price paid during November in Iowa was $174.55 per ton.  This is $40 to $60 per ton higher than prices have ranged over the past three years and $55 per ton over the five-year average.  

Reduced gasoline demand throughout the pandemic has led to much lower production of ethanol relative to prior years.  Reduced ethanol output translates into lower DDGS supply, given DDGS is a co-product of ethanol output.  This, in turn, has allowed prices to churn higher on reduced supply.  Historically, there has been a 60% chance of DDGS prices rising during December.  With prices in Iowa and much of the Midwest pushing up towards, and over, $200 per ton in…

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