Corn and soybeans are getting all the attention now as farmers slug it out to get this year’s crop — which some are now saying may or may not be the monster pegged earlier in the year — out of the field and into the bin as market bulls in those pits in Chicago finally start to show some signs of life here and there after weeks of a one-direction trend.
But while the dust (or mud) is flying in those two segments of the crop sector, sorghum is quietly seeing some major market sunshine. Will this translate to more popularity for the crop, even if it comes in areas where it’s not typically grown? Some say the business is right on that cusp.
The market for sorghum — or milo, as it’s commonly called in the Plains — has quietly been on fire in recent weeks; demand is strong, and farmers are seeing stronger prices. Some speculate that this stronger demand for the crop that’s usually grown in drier climes like the central and southern Plains is here to say.
“Sorghum is very often used to produce alcohol [beverages] in China. The demand has grown, and it is going to grow for a while,” PentAg Nidera trader Tim Murray told Agriculture.com correspondent Luis Vieira earlier this fall.
That demand is showing up in recent export sales data. According to a National Sorghum Producers report, China is joined by Japan in driving export numbers higher . . . way higher.
“Total exports for the current marketing year now total 2.6 million metric tons, equating to approximately 102.5 million bushels. Top contenders for U.S. grain sorghum are once again China and Japan. China has committed to 2.3 million metric tons or 91.6 million bushels. Japan has committed to 39,600 metric tons or 1.6 million bushels,” according to an NSP report. “Exports have proven to be a strong market for U.S. grain sorghum with current export commitments reaching half of the total commitments from the 2013/14 marketing year.”
Adds Hightower Report market analyst Mark Bowman: “[Exports] are running well ahead of last year. Total commitments are 2.6027 billion bushels vs. 1.2351 billion last year at this time.”
The export market isn’t the only home growing for U.S. sorghum: Ethanol plants in the Plains are converting to systems that can utilize sorghum to produce the fuel. In Kansas alone, there are currently 12 dry-mill ethanol plants with an annual production capacity of 550 million gallons using sorghum alongside corn. Those plants use around 183 million bushels of sorghum and corn, according to Kansas Grain Sorghum Producers Association data. It’s got a decent value as a livestock feed, too, either straight out of the field or as a distillers’ grain following the fuel-production process, providing multiple options for markets for farmers like Agriculture.com Marketing Talk veteran adviser Shaggy98, who farms in central Kansas.
“I will feed a little milo to my cattle, but I don’t own enough head to consume it all,” he says, adding there is a nearby ethanol facility that accepts sorghum. “I noticed this morning that my local co-op must have had nearly a +$0.20 basis improvement for milo. Yesterday, corn jumped 7 cents, while milo jumped 27 cents. Milo is only trading 3 cents under corn locally for me.”
That demand is being tracked by an increase in acreage; between the agency’s March and June acreage reports, USDA’s estimate of the U.S. milo crop jumped 12% to a projected 7.47 million acres nationwide. Industry leaders say that should yield about 400 million bushels from this year’s harvest, slightly off last year’s crop size. But the crop has seen steady growth in the last few years. In 2013, 6.68 million acres were harvested, up from 4.96 million in 2012 and 3.93 million acres in 2011.
Some of that growth has come in areas not typically considered milo country. Farmers in places like southern Iowa are starting to plant sorghum as demand — both abroad and at home — continues to grow. Joel Spring raises the crop near Centerville, Iowa, an area that, though far from the highest quality farmland in that state, can produce more revenue per acre when planted to sorghum than any other crop.
“He sees a promising future for sorghum in Iowa from an economic standpoint. He is making $80 to $100 more per acre growing sorghum than other crops he has previously grown,” says Sorghum Checkoff communications specialist Kayla Wilkins. “Grain sorghum is gaining popularity in southern Iowa, especially with the help of major hog producer Murphy-Brown LLC, the Sorghum Checkoff, and local educational field days.”
Also, other farmers are showing more interest in Spring’s area because of that demand and revenue potential. “They want to know the right management practices so when they raise sorghum the first year, everything will be done right,” Spring says in a Sorghum Checkoff report. “Murphy-Brown said they could take enough sorghum to cover 50,000 acres in southern Iowa and northern Missouri. I think it’s a crop that will really take off here in the next five to 10 years.”
Jeff Caldwell10/27/2014 @ 12:45pmMultimedia Editor for Agriculture.com and Successful Farming magazine.