Chinese Imports of Sorghum, Driving U.S. Prices Higher

LUBBOCK, TX – Huge demand from China is driving prices for sorghum in the U.S. higher while lower input costs and exceptional drought tolerance are increasing grower demand. Since the United States supplies roughly 80 percent of the global demand through exports, sorghum always has a buyer albeit at lower prices from time to time. That time is not now according to Dr. Mark Welch, a grain marketing economist at Texas A&M in College Station. “Average cash prices for sorghum are $6.40 per bushel compared to $5.90 per bushel for corn” he explains which gives “sorghum a 50¢ per bushel cash premium over corn.” Just six months ago, however, sorghum traded at half the current price ($2.95/bushel), a 45¢ discount to corn. For insurance purposes where the sales closing date for corn and sorghum was March 15th, the base price for corn was $4.58 per bushel while sorghum was $4.40. With the higher base price, planting sorghum may offer more profit potential than corn.
(SOURCE: All Ag News)