The U.S. ethanol industry will continue to grow in 2009, creating a substantial increase in the supply of distiller's dried grains with solubles (DDGS), a co-product of ethanol.

More than 500 attenders at the U.S. Grains Council's International Distillers Grains Conference in Indianapolis, Ind., heard that ethanol production increased in 2008 by approximately 3 billion gallons to 9.3 billion gallons compared to last year.

Even more critically, production is projected by Informa Economics to reach 11.9 billion gallons in 2009.

According to Ken Hobbie, USGC president and CEO, roughly 33 percent of the grain going into U.S. ethanol production will come out as DDGS.

"We're confident the U.S. ethanol industry will continue to grow due to efforts undertaken by the National Corn Growers Association and state producer organizations over the last several years," Hobbie said. "Due to the efforts of U.S. growers to establish the ethanol industry, we made DDGS our top priority in 2006 and have then since seen DDGS exports exceed 2 million metric tons annually."

Bruce Rastetter, CEO of Hawkeye Renewables -- a council member -- told more than 140 international participants to expect growth in ethanol production and a substantial increase in a high-quality feed ingredient.

"Who would have believed five years ago that the ethanol industry would be the largest supplier of energy in this country? That will happen by the conclusion of 2009," Rastetter said.

Senior vice president of Informa Economics Scott Richman said as a result of the growth in the U.S. ethanol industry seen this year, 22.8 million tons of DDGS were available for global use in the 2007-08 marketing year, nearly a 50 percent increase from the 2006- 07 marketing year.

Richman said the 2008-09 marketing year, which began Oct. 1, will likely experience an additional 50 percent increase in the availability of DDGS, reaching 31.3 million tons.

"There will be a substantial amount of DDGS available for global livestock industries," Richman said. "It looks like we are going to be pushing more DDGS into export markets. The U.S. Grains Council's efforts promoting U.S. DDGS and opening several new markets across the globe is helping the nation's ethanol industry in a big way."

As production increases, the council will have more opportunities to expand markets for the coproduct, he added.