Brazil’s corn industry is discovering DDGS

DDG and DDGS at a warehouse by the company Inpasa. Photos: Daniel Azevedo

In Brazil, they call it “grão dourado,” or the “golden grain” corn. In the past decade new opportunities for corn have emerged in the country to make sure that corn can be valorised even more: by turning corn into ethanol for fuel consumption and selling its by-products as animal nutrition. Pig Progress travelled to Mato Grosso state to learn more.

Without a doubt, one of the most dynamic business sectors in Brazil’s agro-industry is that of corn biorefinery. In just 7 years since crop season 2017–2018, the corn biorefining industry has managed to grow more than twelvefold. In those years, Brazil’s corn ethanol production surged from 520 million litres to 6.3 billion litres, and further growth is on the radar. Fot the next decade, this growth will continue to 14 billion litres.

2 developments

That vast increase is not so much related to Brazilian agricultural policy initiatives or massive subsidy programmes. 2 concurrent developments can explain the increase. The first is the energy transition in the transport sector: using ethanol instead of fossil fuels. Traditionally, Brazil’s biofuel consumption has been relatively high, because about 25% of all transport fuels are biofuels. Most of the cars in Brazil, for instance, are equipped with flexible propulsion systems. They are able to use ethanol as well as petrol. For a long time, the most common biofuel in Brazil was ethanol from sugarcane. Since the crop season 2016–2017, however, corn ethanol emerged from virtually zero to capture 20% of the vast Brazilian biofuel market in 2024.

A second reason to explain the massive success of corn biorefineries relates to the awareness to valorise its by-products. After all, worthwhile feed components can be made from the by-products of corn ethanol production, such as distillers’ dried grains (DDG) as well as distillers’ dried grains with solubles (DDGS).

With the growh of ethanol biorefineries, the production of both DDG and DDGS also jumped in Brazil — from 530,000 tons in 2018 to 3.63 million tons in 2024. Guilherme Nolasco (pictured) is president of Brazil’s National Corn Ethanol Union (UNEM). “The world currently consumes 117 billion litres of ethanol annually and is projected to reach 300 billion by 2030, for use in vehicles, aeroplanes with sustainable aviation fuel and ships, in addition to the growing demand for animal protein and other products.”

The “golden grain”

The year 2024 is not considered in Brazil to be a very good year in terms of harvest. Even in a “bad” year, however, Brazil’s corn harvest is expected to reach 112.7 million tons, 54.4% more than a decade ago.

That upward tendency will continue. According to official projections by Brazil’s Ministry of Agriculture and Livestock (MAPA), the country’s production will reach 176.9 million tonnes by the crop season 2032–2033. A projection that makes sense when considering that corn will not only be used for food and feed purposes, but also to produce ethanol, corn oil, DDG, DDGS and other by-products. Each ton of the so-called “golden grain” can produce 450 litres of ethanol, 212 kg of DDG or DDGS, and 19 litres of corn oil.

Corn by now is Brazil’s second crop after soybeans. Thanks to the favourable climate, Brazilian farmers can grow 3 crops per year in the same area. In Mato Grosso state, for instance, in the Central-West region bordering Bolivia, on the same land in one year, farmers can harvest soybeans, corn and a third crop of choice. A corn crop typically takes up less space than soybeans, Nolasco explains.

“Currently, only about 60% of the first crop area (soybeans) is needed for the second crop (corn). In Mato Grosso state, this is around 20 million ha. In addition, the conversion of degraded pasture land could bring another 26 million ha into this cycle.”

By-products of the corn industry: DDG and DDGS

Both DDG and DDGS are known for their high protein levels, energy, fibres amino acids as well as yeast components. That is why both DDG and DDGS are considered potential alternatives for soybean meal. The 2 are different products.

DDG is short for Distiller’s Dried Grains. That is a solid residue after removing ethanol from the fermentation liquid. DDG is typically used in animal feed as it is rich in protein and fibre.

DDGS (Distiller’s Dried Grains with Solubles) is similar to DDG but has been enriched with enzymes for further fermentation. DDGS is therefore richer in protein and energy than DDG for animal feed and can be a partial substitute for other ingredients such as maize or soy.

The first time DDGS made a vast entry on a global level was around 2010, when pushed by the market US gas companies also started adding ethanol to their fuels to be less dependent on fossil fuels. It led to a surge in the emergence of DDGS on the North American market, with also a debate flaring up that can be summarised as the “food vs feed” discussion: would animal feed become more expensive if fuels were to take out a lot of corn from the market?

DDG and DDGS are both competitive alternatives for animal husbandry, because, depending on the process, the products can contain 18% to 43% protein and 20% to 40% energy. In terms of production, however, costs are 15% lower than other feed ingredients.

Addition of factories

The projection of increasing the corn supply, combined with the demand for green biofuels and sustainable foods, has led to a real boom in plants dedicated to grain processing. According to UNEM data, here are 21 plants for corn biorefining in Brazil. The vast majority (over 80%) emerged in the last 5 years. The lion’s share (18 refineries) are in the Central-West region including Mato Grosso state. In addition, there is one in the south (the states known for pig and poultry production), another one is located in the South East (the region including the cities Rio de Janeiro and São Paulo). Another one is located in the North East region.

Another 9 plants are about to be taken into use, of which 5 in Mato Grosso state. In addition, UNEM says that at least another 11 plants are in the planning stages. For this feature, Pig Progress visited various plants in Mato Grosso state, amongst those FS Bioenergy in the town Lucas do Rio Verde.

DDG world market

Corn ethanol plants produce both DDG and DDGS, which are considered high-quality alternatives for animal production. Nolasco says, “DDG and DDGS are strategic and advantageous alternatives for farmers, whether for the intensification of animal production, conversion of degraded areas, or adding value to corn by-products.”

Currently, the United States dominates that market, as it is the largest corn ethanol producer. The United States DDGS exports exploded from 5 million tons in 2009 to more than 11 million tons, to 58 countries in the season ending 2023. Of that amount, Mexico purchased the bulk, buying more than 20%, while South Korea took the number 2 position. Vietnam, Indonesia and Canada completed the list of top-5 importers for the season ending 2023.

In comparison, in 2024, Brazil produces about 4 million tons of DDG and DDGS and is expected to export between 800,000 and 1 million tons. To illustrate the potential: the country’s feed production reaches about 83 million tons.

Global market for Brazil’s produce

Nolasco says that Brazilian DDG and DDGS products are already being shipped around the globe, with exports to Indonesia, Japan, New Zealand, South Korea, Spain, Turkey and Vietnam. China is expected to open its market for Brazilian DDG and DDGS products. Future shipments could provide further opportunities for Brazil to expand its global position in animal husbandry. On the one hand, it could help produce even cheaper and better domestically and help provide better products worldwide.

Nolasco concludes, “Therefore, the DDG and DDGS market is an investment strategy. We did not have a production chain previously, but today we do. We believe that DDG and DDGS could represent up to 25% of the corn biorefinery business.”

Feeding corn by-products to pigs in practice

The city of Lucas do Rio Verde in Mato Grosso state is one of Brazil’s major agricultural cities. With a population of over 80,000, the headquarters of large pig farms, an integrator and a DDG producer can be found here.

Luiz Henrique Carvalho.

The pig farm

The Fazenda Mano Júlio farm uses both DDG and DDGS concentrates in its diets for pigs and poultry. The farm sends 100,000 pigs per year to the Brasil Foods (BRF) integration. In fact, the farm’s animal production is fully dependent on BRF, as nutrition, health and genetics are all supplied by the integrator.

Luiz Henrique Carvalho is the farm’s pig production manager. “The DDG makes a difference because we get 843 g weight gain per day. In the past, we achieved 820 g/day. Other pig groups cannot achieve this level of feed conversion.”

The pig farm Fazenda Mano Julio in Lucas do Verde in Mato Grosso state.

He says the pigs also get fed soybean meal, corn, limestone and salt, leading to an average of 2.25 kg of feed that is needed to grow 1 kg of meat. “We deliver animals at 130 kg after 120 days, receiving the piglets at an age of roughly 4 weeks. So we achieve almost 1 kg growth per day, which is good for Large White breeds. We value gaining meat, not fat. It helps to keep a standard on the carcass.”

The integrator

Integrator Brasil Foods is omnipresent in the city. The BRF facilities here are among the largest in Brazil, including a large processing plant for both pigs and poultry, as well as a feed facility. The processing plant currently processes 5,000 pigs per day, intended for sales to China and Hong Kong. The unit’s capacity is 10,000 per day, so there is room for growth.

Sidney Silvestre da Silva is agricultural coordinator at the BRF unit. “We had a pause in exports to China until the recertification in 2023. Recently, there was another exciting milestone here which was the allowance to export to the markets in the United Kingdom.”

Not surprisingly, the processing plant alone supports an entire pig supply chain, involving 5 agricultural groups consisting of 10 sow farms, and 44,000 sows. In addition, the BRF unit supports another 30 farm groups with 415,000 animals for finishing.

Silvestre da Silva says that the BRF feed plant produces more than 3,100 tons of feed meal per day, using 250 tons of DDG and DDGS concentrates daily in its formulation. Its storage capacity reaches up to 145,600 tons.

The FS Bioenergy factory in Lucas do Rio Verde.

The DDG producer

FS Bioenergy produces the DDG that BRF uses. It is one of the pioneers in producing the product in Brazil, which is presented as a High Protein DDG (HPDDG). The company says that the product is rich in essential nutrients, offering high protein and energy levels, which are vital for various animal species. Brian Mark is commercial trader at FS Bioenergy. “This sustainable option improves animal nutrition and achieves 15% better cost-efficiency when compared to soybeans, reducing waste and optimising the use of resources.”

According to him, the product is full of amino acids, minerals, proteins, yeast and other essential nutrients sourced from the ethanol production process. “That ensures a balanced and high-quality diet.”

According to Mark, the company’s product FS Essencial offers more undegraded protein for better nutrient uptake than soybean meal (63.1% vs 34.1% in protein). He recommends a certain proportion for each animal growth phase, beginning at 10% for piglets, growing phase up to 20%, finishing phase up to 11% and reproduction/lactation up to 15%.