The Hancock-Henderson Quill, Inc.

China's Anti-Dumping Lawsuit of DDGS Has Been Dropped

by Dessa Rodeffer/Quill Publisher/Owner

Big River Resources, West Burlington, Iowa, and The U.S. Grains Council said they are very pleased that China's Ministry of Commerce has announced the anti-dumping investigation against U.S. DDGS exports to China has been terminated.

In the announcement, the Ministry of Commerce stated that the applicants in the case withdrew their petition on May 10, 2012, which resulted in the Ministry terminating the investigation in accordance with China's anti-dumping regulations. No anti-dumping tariffs will be imposed.

"This could have negatively affected DDGS exports to China which ultimately would have negatively affected the price of corn in the U.S.

"No other time on record has an anti-dumping assessment from China been dropped without penalty or fine. This is very positive news for the ethanol industry and the American corn farmer," said Raymond Defenbaugh, CEO of Big River Resources.

Defenbaugh and Big River Resources were leaders in fighting this suit which several indicated they felt was filed by the Chinese due to the number of lawsuits by the U.S. on China.

Around this time last year, the Grain Council toured a group of Chinese through Big River's Ethanol plant in Galva and then to Kirkwood at the Defenbaugh families 4th of July picnic. After viewing the high quality DDGS, they said they realized putting a tariff on the DDGS would only add cost to their purchasing the feed that they desired. However, at that time, the consensus was that the Chinese would not likely drop a lawsuit that they had put in place against the U.S..

The news brought much rejoicing across the ethanol and commodity world.

"Good news! Congratulations to Ray Defenbaugh and Big River Resources for leading the effort," said Jeff Broin, President of Poet.

Poet is the largest ethanol group, with six ethanol plants. Broin also chairs the Board of Growth Energy.

CEO of Growth Energy, Tom Buis, sent "Congratulations on a big victory" to Jim Leiting, BRR General Manger and to Ray Defenbaugh.

Buis said this would not have happened without their leadership, resources and dedication and said their actions will benefit the entire industry.

The U.S. Grain Council said they are appreciative of the thoughtful and constructive way in which the various agencies in China involved with this process have collaborated to resolve this issue.

The Council also commends the broad coalition of U.S. stakeholders that supported the Council's legal efforts in this matter which was lead by Big River Resources.

The Council also extends its thanks to the numerous industry leaders and other stakeholders in China who are leading the growth and modernization of China's livestock industry and who recognize the value of U.S. DDGS in that effort.

The anti-dumping petition was initially filed Dec. 28, 2010. Until very recently, the industry experts predicted China would access upward of 15% or more tariff, and if this happened they predicted other countries would follow suit.

The U.S. Grains Council immediately reached out to U.S. stakeholders to organize a response. The Council subsequently participated in evidentiary hearings in Beijing and has cooperated fully with the ongoing Chinese disposition of this case.

The Council and Big River Resources said they are gratified by the result and looks forward to continuing the mutually beneficial trade relationship between the two countries.

Not everyone chipped into the costly legal expense of this case in the ethanol world across the U.S., but everyone will benefit from this win.

While all of Big River Resources' DDGS in West Burlington, Iowa are sold locally, a portion of their other plants export DDGS to China and other countries, Defenbaugh said. "The negative affect on corn prices would have been dramatic."