The Upper Great Plains Market

As the price of gasoline continues to increase in the United States, the role of corn-based ethanol continues to increase. As this happens, the amount of the byproduct, DDGS, increases as well. Ethanol producers in the Upper Great Plains are forecast to produce 4,400,000 metric tons of DDGS in 2007, of which 12 percent to 15 percent is expected to be exported.

DDGS is valuable as livestock and poultry feed, and has proven popular in international markets, particularly Asia. But it poses problems when transported in traditional hopper cars, since the feed tends to stick to the bottom of the cars and requires a lengthy and costly effort to extract. It is far easier and less costly to unload and clean DDGS from containers.

At the same time, the market for IP grain is enormous. Processors move some 330,000 metric tons of food-grade soybeans per year in this area, and quality wheat production in the Upper Great Plains is just as huge. Just among several large processors in this area, the aggregate value-added production is 340,000 metric tons annually. The 2007 forecast for soybean feed is 6.2 million metric tons in the Upper Great Plains, and approximately 35 percent of this production is targeted for export. In Taiwan, which has been the largest destination for soybeans shipped in containers, crushers, feed millers and the trucking companies have made substantial investments in equipment to receive bulk commodities by container. The Taiwan industry is encouraging the U.S. to expand its capabilities to load containers.

The aggregate 2007 export transportation market value is approximately $550,000,000 in Western Minnesota and eastern North Dakota and South Dakota and is expected to rise to $650,000,000 by 2011.