Analyzing determinants of US distillers dried grains with solubles exports

Abstract

AbstractThe exports of US distillers dried grains with solubles (DDGS), a coproduct of corn ethanol, have grown more than five‐fold over the last decade. However, there is limited knowledge of what factors drive US. DDGS exports and how those factors could impact future US DDGS exports. This study aimed to identify the determinants of US DDGS exports and estimate the growth of DDGS exports to major international buyers. A commodity‐specific gravity model was estimated using the pseudo‐Poisson maximum likelihood method for US DDGS exports to 29 countries over 2000–2013. Results suggest that the importing country’s meat production, technical barriers to trade, tariffs, and US ethanol production influence US DDGS exports. A baseline outlook for US DDGS exports to the six major importing countries through 2020 generated from the estimated gravity model shows China’s commodity and trade policy could have a vital impact on US DDGS exports. Variations in DDGS exports under the scenarios of high and low meat production in those importing countries were also derived.