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A cooperation agreement between the U.S. Grains Council and a Chinese dairy association has expanded the U.S. DDGS market eastward, where the potential for growth is enormous.

The U.S. Grains Council is helping to increase exports of U.S. dried distillers grains with soluables (DDGS), a co-product of the ethanol industry, through its cooperation program with dairies along China's coastline. On March 10, 2009, the USGC signed a cooperation agreement with the Guangdong Provincial Dairy Association. Through their agreement, the USGC provides educational sessions, demonstrations and training in an effort to increase demand for U.S. DDGS in China.

Thanks to the quality of U.S. DDGS, the affordability of the feed ingredient and the marketing efforts by the USGC, demand has risen consistently since 2007 and shows no sign of slowing down.

Cooperation Agreement

The USGC has utilized cooperation agreements for a number of years to expose developing nations to modern feeding technologies and practices. The agreement with the Guandong Provincial Dairy Association was designed to help teach members of the association how to use U.S. DDGS as a ration in their dairy feed.

Cary Sifferatch, director of USGC Beijing, says the agreement is beneficial for both sides, not just the Chinese dairy farmers.

"The agreement says that the Guangdong Provincial Dairy Association will cooperate with USGC on all dairy management training programs within Guangdong Province," says Sifferath. "They help us set up on-farm consultations where we can go directly to dairy farms and show how U.S. DDGS can be used in dairy rations. Also, the association must assist USGC in doing an annual benchmarking survey to see how well our dairy management training programs are meeting the goals we set forth each year."

Mike Callahan, USGC senior director of international operations for Asia, says cooperation agreements such as these are successful because they give foreign markets the opportunity to see the product firsthand.

"Proving to the Chinese dairy associations that U.S. DDGS is a valuable product takes more than simply saying ‘we've been using it in the United States, so you should, too,'" says Callahan. "The demonstrations we provide are necessary because they want to try it, smell it, see how it works."