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Russian Producers Looking for US DDGS

by 5m Editor
22 October 2008, at 10:38am

GLOBAL - The rapid growth of Russia's poultry and pig industries has created demand for distillers dried grains with solubles (DDGS), according to a US Grains Council consultant in Russia.

Russia is the biggest country in the world and has the eighth largest population with approximately 141 million people. According to Alex Kholopov, US Grains Council consultant in Russia, the livestock and poultry industries in his native country are growing 'very rapidly'. The substantial growth is due in large part to the government's decision to make agriculture a national priority. Specifically, Kholopov said prior to the government's focus on agriculture, it was nearly impossible for livestock and poultry operators to borrow money for longer than a year. Today, the Russian government has afforded the industries with loans for up to eight years with zero percent interest.

"We are now seeing Russia's poultry industry grow 16 to 18 percent annually. It is the fastest growing agricultural industry in the country," he said. "At the same time, Russia's swine industry is in a transformational phase. This industry was previously very small with operators only feeding a few hogs at a time. We are seeing that trend shift to a more modernized industry similar to the United States."

Kholopov said the swine industry has doubled in two years and will likely continue to grow at this pace, increasing the likelihood of the industry to consume nearly all domestically produced corn. As a result, leaders in Russia's poultry industry are looking to US distillers dried grains with solubles, a co-product of US ethanol. Dmitry Lvovich, assistant to the general director of OGO Group, one of the top three companies in Russia in terms of elevator capacity, livestock feed output and poultry production, is attending the Council's International Distillers Grains Conference (IDGC) in Indianapolis, Indiana this week.

"I am here [at IDGC] looking for the right supplier of US DDGS to establish a long term relationship," said Lvovich. "I am convinced of the value of DDGS as a feed ingredient due to the US Grains Council providing educational seminars in Russia.

"Just as importantly, my company was looking for economic justification for using distiller’s grains and after the Council brought consultants to Russia a few months ago, we found the co-product to be very price competitive."

Lvovich said when a reliable supplier is identified, OGO will work vigorously to get the US company registered to export DDGS to Russia. He said the biotechnology registration process typically takes one year, but he is hopeful the process will only take a few months. When the registration is complete, Lvovich said OGO will be turning to the Council for technical assistance.

"We will need to know how to efficiently and effectively feed the product," he said. "We are particularly interested in the nutritional components of distillers grains. We foresee other companies following our lead and incorporating DDGS into poultry rations in the near future. Much promotional efforts are needed right now."

Currently in Russia, the livestock and poultry industries utilize 18 million metric tons of feed ingredients with 60 to 70 percent going into poultry rations. Kholopov said Russian poultry operators will likely include DDGS into rations at 7 to 8 percent initially.

"I anticipate the Russian poultry industry will import approximately 500,000 metric tons of US DDGS within the next two to three years," Kholopov said.

The IDGC is a cooperative effort between the Council and BBI International. The event's sponsors include Council agribusiness members Agri Alpha; Hawkeye Gold; Furst-McNess Company; Renewable Products Marketing Group; Gavilon; and Quality Technology International. Council producer checkoff members sponsoring the conference are Iowa Corn Promotion Board; Indiana Corn; and Wisconsin Corn Promotion Board. The event concluded on 21 October.

5m Editor