The U.S. Grains Council set an ambitious goal in early 2020 to create 1.1 million metric tons of new demand for U.S. distillers dried grains with solubles (DDGS) in Southeast Asia by targeting the aquaculture feed industry. Through a series of research projects with both public and private partners, the results are flowing in and showing economic and nutritional advantages of using the co-product in diets for shrimp and tilapia.
DDGS show very good value in the least cost formulation programs as a feed ingredient for lower crude protein feeds such as tilapia. Factors including xanthophyll and phosphorus availability also may make DDGS attractive to higher-value species like shrimp.
Aquaculture is a large and growing production area; in 2019, 6.5 million tons of tilapia and 3.8 million tons of shrimp were produced globally. Aquaculture feed for these species – specifically tilapia – is produced by modern, integrated feed mills, meaning knowledge transfer is easily translated into demand. The Council determined the major constraint to DDGS use in aquaculture is not fear of trying but the general lack of clarity about maximum allowable levels. Without this data, it is unfeasible to consult on appropriate DDGS use for aquaculture feed.
To fill the existing knowledge gap, the Council started exploring markets in Southeast Asia for potential research partners. Indonesia was identified as a key target market due to the current aquaculture feed demand of 1.8 million metric tons annually and aggressive domestic policy seeking to reduce dependence on wild-caught fish.
The Council partnered with one public and one private entity to examine the utility of DDGS in feeding the shrimp L. vannamei under Indonesian conditions. A virtual memorandum of understanding was signed in the summer of 2020, and the first feeding trial began in early September. As the Council shares the data resulting from this research, potential market demand for DDGS will increase from 315,000 MT in 2019 to 1125000 MT at 15 percent inclusion, an increase valued at USD 170 million.
As a direct and immediate result of the accumulation of this data, our partner aquaculture feed producer in Indonesia raised their maximum DDGS limit in shrimp feed to 15 percent, creating 50,800 MT of demand from their previous 13200 MT in 2019. This increase is valued at USD 7.8 million.
The Council invested USD 23760 in Market Access Program (MAP) funds to support this consulting engagement. As a result, the partner company raised DDGS demand levels by 37600 MT valued at USD 7.8 million, a direct return on investment (ROI) of USD 328 per USD 1 of MAP funds invested. Indirect future return can be valued at USD 170 million, achieved through 810000 MT of additional DDGS growth potential in Southeast Asian shrimp rations.
Source: Ethanol producer