U.S. corn exports to China have been dominating many trade headlines in recent weeks. However, as strong headwinds dampened sales, Chinese buyers are increasingly turning their focus to U.S. grain sorghum.
Combined sorghum exports and outstanding sales to China are up from absolutely zero last marketing year to more than 2.2 million metric tons (87 million bushels) this marketing year through March 6, according to USDA’s Foreign Agricultural Service.
Tim Lust, CEO of the United Sorghum Checkoff Program, says Chinese buyers’ are expected to purchase over 3.1 MMT for the 2013 marketing year, representing a whopping 40 percent of the U.S. sorghum crop. And new crop purchases are already starting.
“In a lot of grain terminals, sorghum is trading above the price of corn in the U.S., but still below the cost of buying and shipping it to China,” notes Lust.
Last week, the U.S. Grains Council hosted a team of sorghum industry representatives to China to assess China's potential as a future market of U.S. sorghum. While there, the team talked to the feed and livestock industry about the benefits sorghum feed has in pork, poultry and aquaculture production.
“We’ve always been promoting sorghum as part of our mix in China, but for the longest time most of our sales have been to Mexico,” notes Tom Sleight, President and CEO of the U.S. Grains Council. “With restrictions on corn imports (as a result on private tariff rate quota allocations) and problems we’ve been having with biotech acceptance of some traits, sorghum has become the new darling in China.”
Sleight said the Council’s primary goal is to now make sure that Chinese millers have a “positive acceptance” of the crop and noted that the Council has stepped up both technical and customer servicing programs to make this happen.
“Talking to customers before, during and after sales is what we do,” he added.
Whether or not the additional export demand will translate into more planted acres of grain sorghum in the U.S. this year remains to be seen. U.S. growers planted 8.1 million acres of the drought-tolerant crop in 2013 – primarily across the High Plains region - but that’s down considerably from the record high of almost 27 million acres in 1957, and more recently, 13 million acres in 1996, according to USDA’s National Agricultural Statistics Service. The USDA will report on farmers’ planting intentions on March 31Lust says seed sales appear to be “way up” and he expects acreage to expand across central Kansas and northern Oklahoma. But peering outside his Lubbock office at the dusty, windswept landscape, he says it’s hard to predict what will happen in Texas, the second largest state for sorghum production in 2013.
“It’s so dry here that it’s hard to tell if growers will try cotton or sorghum,” Lust adds. “But we could sure use more sorghum.”
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