Distillers Grains Market

Distillers Grains Market Synopsis

Distillers Grains Market Size Was Valued at USD 15.6 Billion in 2023, and is Projected to Reach USD 20.89 Billion by 2032, Growing at a CAGR of 3.3% From 2024-2032.

The Distillers Grains Market involves the products, by products which are derived from the process of distillation in the ethanol production. Distillers grains are concentrated fermented feed that is mainly made up of the grains and solid remnants extracted from ethanol production from grains such as corn, barley, wheat or sorghum. Such co-products such as Dried Distillers Grains with Solubles (DDGS) is used as animal feed in livestock, poultry and fish farming because of their high protein concentration and energy density. The market for distillers grains is increasing around the world due to the higher need for ethanol products and a constant growth of livestock production. Given its availability as an animal feed along with other by-products of ethanol production, distillers grains remain as a very significant product in the agricultural retail business. Further, the distillers grains market is also greatly affected by regional changes in grain production, government’s policies on bio fuels, and volatility in the price of primary grains available in the market.

The global distillers grains market has shown considerable growth in the past due to the growth in ethanol production resulting in the increased demand for biofuels mainly in North American Europe and Asia. They pointed out that renewable ethanol, that is fuelproduced predominantly from corn and other grains, has become one of the favoured products of governments seeking cleaner energy solutions. The huge production of ethanol in turn produces a large quantity of distillers grains which in same way fuels the market. Demand is strongly influenced by distillers grains used in animal feed since they are effectively a cheap source of protein for the animals being fed. Additionally, intermediate usage in the production process and the rising rates of meat and dairy product consumption, especially in countries in the development stage, creates demand for animal feed digest ingredient like distiller grains.

Innovations in the distillers grains market concerned with the processing improvements that increased the nutritional value of these products and their potential uses in other sectors in recent years. It is believed that expanding value-added products, including high protein distillers grains, will create new market opportunities throughout feed and food chain, for example, fish feed market and pet food market. However the opportunities have prospects such as shocks in feed costs, trade inefficiencies, and skepticism over the effects of biofuel farming. However, looking at the big picture the outlook for the distillers grains market remains bullish, due to the increasing usage of biofuels and the need for animal feed in the world agriculture market.

Distillers Grains Market Outlook, 2023 and 2032: Future Outlook

Distillers Grains Market Trend Analysis

Trend: Increased Adoption of DDGS in Aquaculture

Firms in this distillers grains market have observed that trends that rise in the use of Dried Distillers Grains with Solubles (DDGS) in aquaculture. earlier it has been in limited demand in cattle and poultry feeding but recently it is has found acceptance in fish and shrimp production also. This change is being occasioned by the rising need for feed inputs gotten from sustainable sources in global aquaculture . It is rich in protein fiber and fats and that’s why replaces fishmeal and soy products that are usually used in feeding animals. Moreover, the DDGS is cheap, and as a result, its high availability in areas having increased ethanol production, there is cheap feed for aquaculture farmers, producing quality fish. The ongoing increase in the global demand for fish and seafood will in accelerate the use of DDGS in aquaculture, thereby promoting the distillers grains market.

Driver: Rising Demand for Ethanol and Biofuels

The main influence in the distillers grains and solubles market is the increasing trend towards ethanol and bio fuels. Ethanol, which is a special type of bio- fuel derived from crops like corns, barley and wheat, has been used extensively to replace fossil based fuels across the world. In its production, ethanol manufacturing produces distillers grains that are used as animal feed. Since various governments and industries seek sustainable solutions to attain or decrease their emissions of greenhouse gases, ethanol is one of the popular types of biofuels. This need for ethanol would automatically entail a constant market for distillers grains, for its by-products hence benefiting the industry. Huge investments in the construction of additional ethanol production plants especially in North America and Brazil are expected to cause a rise in the distillers grains market going forward.

Restraint: Fluctuating Grain Prices and Production Costs

One constraint that is principally observed in the distillers grains market is flutters of grain costs and therefore the consequent manufacturing price range. An analysis of prices of distillers grains clearly indicates that since distillers grains are by products from grains such as corn, wheat and barley the prices of distillers grains move in tandem with the prices of grains. For instance, whenever corn prices are high due to either low yields or market shocks such as trade barriers, costs of making ethanol and, thus, distillers grains shoot up. This sort of price fluctuation can deter distillers grains from being more affordable relative to other feed ingredients and especially when feed grains are also expensive. In addition, due to reliance on agriculture, and constant sensitivity of crops to weather conditions this becomes a hard nut to crack for the various market players who find it hard to contain fluctuating production costs.

Opportunity: Rising Demand for Sustainable Animal Feed

Clean label is becoming popular in the food industry, and this, inturn, is creating a niche market for distillers grains as animal feed. As consumers become more sensitive and environmentally conscious, consuming with sustainable agriculture practices continues to grow. Since distillers grains origin from ethanol production, they offer an eco-friendly option as Supplements to animal feeds as compared to soybean meal and fishmeal for example. They provide an opportunity to minimise food waste since it will use feedstock that would otherwise be a sub-product of the biofuel sector. This trend growing concern for ethical meat and dairy products increases the likelihood of using ingredients such as distillers grains, as a momentous growth prospect for the market.

Distillers Grains Market Segment Analysis

Distillers Grains Market Segmented on the basis of type, Source and Livestock.

By Type

o   Dried Distillers Grains with Solubles (DDGS)

o   Dried Distillers Grains (DDG)

o   Wet Distillers Grains (WDG)

By Source

o   Barley

o   Sorghum

o   Rye

o   Millet

By Region

o   North America (U.S., Canada, Mexico)

o   Eastern Europe (Bulgaria, The Czech Republic, Hungary, Poland, Romania, Rest of Eastern Europe)

o   Western Europe (Germany, UK, France, Netherlands, Italy, Russia, Spain, Rest of Western Europe)

o   Asia Pacific (China, India, Japan, South Korea, Malaysia, Thailand, Vietnam, The Philippines, Australia, New-Zealand, Rest of APAC)

o   Middle East & Africa (Turkey, Bahrain, Kuwait, Saudi Arabia, Qatar, UAE, Israel, South Africa)

o   South America (Brazil, Argentina, Rest of SA)

By Type, Dried Distillers Grains with Solubles (DDGS) segment is expected to dominate the market during the forecast period

Based on the type of product, the Dried Distillers Grains with Solubles (DDGS) segment is likely to control the distillers grains market through the forecast period. This can be explained using the fact that DDGS is a high protein, high energy by-product which finds application in animal feeding, especially in the livestock and poultry sectors. The fact that GGDS contains a relatively high level of protein, fiber and fats it is seen as a ideal substitute to soybeans and corn among feed producers. The rising consumption of meat and meat products, especially protein and in the developing world, will significantly push the consumption of DDGS. Moreover, the rising use of Partnership in aquaculture supplements as well as feed in pet food industries drives its market share even further. As if it were used in many industries and its demand is rather high the DDGS segment can be considered the leader of the distillers grains market.

By Source, Barley segment expected to held the largest share 

The barley segment appears to be the largest segment in the distillers grains market since barley is widely used in ethanol production. Barley is one of the favoured grains for ethanol production based especially in areas that have a traditionally based barley farming industry for example the European Union and some parts of North America. The trash produced by barley base ethanol production such as distillers grains are been used more in animal feed because of their quality. The growth of the barley segment originates from the rising demand in using barley for ethanol production and the rising utilizing of distillers grains to feed livestock and poultry. Looking at the future, with distillers ethanol having a steadily growing market, the barley segment is predicted to continue to hold the greatest portion of distillers grains market.

Distillers Grains Market Regional Insights

North America is Expected to Dominate the Market Over the Forecast period 

North America was identified as the largest market for distillers grains in 2023. Currently the world’s largest regional production capacity for ethanol is in the United States which produces ethanol derived from corn. Therefore, large production of ethanol production facilities in North America has contributed to its dominance in distillers grains market. Each year the United States produces millions of metric tonnes of DDGS which are mainly used as animal feed both for the local as well as export market. Agricultural structuralization and rise in demand of bio fuels binding the area to its premiere position in the market of distillers grains. North America is expected to have the largest share in the market; however, its value is anticipated to remain important in the forecast period as well.

Distillers Grains Market Share, by Geography, 2023 (%)

Active Key Players in the Distillers Grains Market

o   ADM (Archer Daniels Midland Company)

o   Agro Vision Ltd. – (India)

o   Al Dahra ACX Global

o   Bunge Limited – (USA)

o   Cargill, Incorporated – (USA)

o   China National Petroleum Corporation (CNPC)

o   Darling Ingredients Inc. – (USA)

o   Grain Millers, Inc. – (USA)

o   Green Plains Inc. – (USA)

o   Kemen USA – (USA)

o   Midwest AgEnergy – (USA)

o   Poet LLC – (USA)

o   The Andersons, Inc. – (USA)

o   Valero Energy Corporation – (USA)

o   Vitol Group – (Switzerland)

o   Other key Players

Global Distillers Grains Market Scope