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However, the demonstrations would be useless had the USGC not had a quality product to work with. A main reason that U.S. DDGS exports are increasing is because the quality is superior to that of China's domestic DDGS.

U.S. DDGS Advantage

U.S. DDGS appeals to Chinese dairy farmers for many reasons. It's competitively priced, it's a good source of energy and protein, and U.S. DDGS has very little variability. China has its own supply of DDGS because of its grain-based ethanol and alcohol production, so many feed companies and livestock operations have used domestic DDGS in the past, but were not impressed with the outcome. The USGC's goal now is to reverse the thinking in China that DDGS is a poor quality feed ingredient.

"Chinese DDGS is of a different quality than U.S. DDGS, with lower energy, lower digestible protein and lower available phosphorus levels," says Sifferath. "USGC educates Chinese endusers on the nutritional value of U.S. DDGS and the fact that the United States has a growing supply of DDGS, as the U.S. ethanol industry continues to grow."

According to Callahan, the Chinese farmers who attend DDGS demonstrations almost immediately notice the higher quality of U.S. DDGS.

"We've found that by and large, when doing demonstrations, we don't have to give away the sample," says Callahan. "They're usually willing to buy a container as soon as we show them the product and how to use it."

The price of U.S. DDGS has also impacted its growth. Since Guangdong is part of the coastal region of China, it allows U.S. DDGS to be competitive with other feed ingredients because the imported DDGS are used in the feed of livestock industries located close to the importing facilities. Transportation farther inland China usually makes U.S. DDGS less competitive.

Growth Potential

Although right now the coast is the primary location where U.S. DDGS demand is increasing, there is great potential for it to increase elsewhere. The upward trend has already begun. In 2007, China imported around 100 metric tons of U.S. DDGS. In 2008, China imported 8,500 metric tons of U.S. DDGS, and thus far in 2009, China has imported roughly 4,400 metric tons. And there is still potential for China to import much larger volumes.

"We have already seen the Guangdong Dairy Association become a repeat buyer of U.S. DDGS to supply to several dairy farms throughout Guangdong Province," says Sifferath. "We hope to repeat similar experiences in the dairy farming areas of Shanghai."