By Roberto Samora
SAO PAULO, Oct 9 (Reuters) - The production of dry grains by distillation (DDG) will grow by more than 60% in Brazil this year, a boon for meatpackers looking for cheaper alternatives to feed livestock, an industry group said.
According to the National Corn Ethanol Union (UNEM), DDG production is expected to reach around 2 million tonnes in 2020, up from 1.2 million tons in 2019 as more corn-ethanol plants come into operation in the South American country.
DDG can replace corn and soybean meal in cattle, poultry and pork rations.
"DDG can be a substitute for soybean meal despite having lower protein levels," UNEM president Guilherme Nolasco told Reuters. "It is more affordable too."
According to Scot Consultoria, in the second half of September the average price of a tonne of soymeal in Mato Grosso - Brazil's largest farm state - was 2,000 reais ($361.73) compared with 1,000 reais for DDG.
While the price gap is wide, the difference in terms or gross protein levels narrower, with soymeal having 48% of protein content and DDG 32% on average, Scot Consultoria data shows.
The expected increased in DDG production will help cut costs for meatpackers at a time corn and soy prices are on the rise amid a drought at the start of Brazil's planting season.
DDG is used widely in the United States, the largest global ethanol producer.
($1 = 5.5290 reais) (Reporting by Roberto Samora Writing by Ana Mano Editing by Marguerita Choy)
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