DDGS Demand Weakens in US Amid Tight Hog Margins

The US demand for distillers dried grains with solubles (DDGS) is weakening due to tight hog margins and high prices of key feed ingredients. Livestock producers are becoming more cautious, buying only what they need in the near term.

High corn and soybean meal prices have squeezed profitability, making DDGS less competitive at 120% of soybean meal's protein value. The pork market is also under pressure with pork loin prices falling to $1.20/lb by late September from $1.36/lb in early August.

This may lead hog producers to avoid expanding herds or even reduce production, limiting demand for DDGS and other feed ingredients in the coming months. Additionally, DDGS supply could increase as ethanol plants complete maintenance and new corn enters the market, putting more pressure on US DDGS prices.