Posted on Jan 14, 2015
By: Kayla Wilkins, Communications Intern
The market place for sorghum both domestically and internationally has steadily increased within the last five years. In fact, exports of U.S. grain sorghum have already surpassed last year’s total just four months into the marketing year.
“Demand for sorghum is at an all time high,” said Florentino Lopez, Sorghum Checkoff executive director. “This demand is revealed through the purchasing patterns of the export market. In fact, bushels destined for export as of Jan. 8 have already reached 237.4 million bushels, 12 percent higher than last year’s sales.”
Five years ago, the export sector accounted for 30 percent of theU.S. grain sorghum market. At that time, Mexico was the largest importer, committing to approximately 973,042 bushels of grain sorghum weekly. However, in 2013 sorghum exports skyrocketed when Gun Jen Juee Agriculture Trading Company became the first company to import U.S. sorghum into China.
“I think with rapid growth in the Chinese feed industry, sorghum is a promising feed material for our company," said Paul Huang, Gun Jen Juee marketing manager. "The cost of grain sorghum is competitive and the nutrition is high for livestock feed production.”
Prior to Gun Jen Juee purchasing U.S. grain sorghum, there was no market for the crop in China. Last year alone, Gun Jen Juee imported approximately 1.5 million tons of sorghum, and they anticipate imports to continue increasing.
Brian Lohmar, director of the U.S. Grains Council office in China, said the demand for sorghum in China has increased dramatically within the livestock industries. Lohmar said after research indicated the high nutritional quality of sorghum, feedlot and livestock industries decided purchasing sorghum was a smart choice.
“They saw a large import margin and high nutritional value, so they brought in sorghum,” Lohmar said. “I think the big surprise was it went from zero to 118 million bushels in a year.”
While China went from importing seemingly no grain to being the largest importer of U.S. grain sorghum, the U.S. Grains Council in cooperation with the Sorghum Checkoff is striving to maintain a permanent market in China for livestock feed and human consumption.
“We're hoping the businesses that market themselves with high quality pork will start to see sorghum as a way to improve pork quality,” Lohmar said.
The booming success of the Chinese demand for U.S. grain sorghum has proven to be beneficial for growers in terms of basis and viability. Establishing a more permanent market in China will lead to a more diverse market and long-term producer profitability.
"The Sorghum Checkoff is here to help producers increase their profitability," Lopez said. "We are dedicated to the producer to do just that, and while the export market is vital, we have not forgotten about other market opportunities, including other long-term partners like Mexico and Japan."
Market trends over the last few years have shown that food-grade sorghum and the ethanol market are growing, as well.
The human-food sector has new products hitting the shelves regularly. Qualities such as naturally gluten-free and non-transgenic, make it a popular item among consumers. In fact, products are no longer just reaching niche markets but are now expanding into mainstream brands, such as Kellogg’s Special K Gluten Free cereal. The pet food market is also increasingly utilizing sorghum in their products, including Iams dog and cat food.
The ethanol industry’s use of grain sorghum is also a value-added market. Approximately 36 plants across the U.S. have utilized grain sorghum in ethanol production. Nearly 336 million gallons of ethanol were produced annually over the last five years, saving consumers an average of $3.1 billion at the pump each year.
Lopez said demand today exceeds supply, and the Sorghum Checkoff will continue to maintain and increase opportunities for producers to strengthen supply and fill the growing demand for sorghum in all marketplaces.
“Today the market is China,” Lopez said. “Tomorrow, who knows where that might be, but the end result will be producers gaining more profits.”