Posted on Apr 09, 2014
Post by Jesse McCurry, Sorghum Checkoff Regional Director
Grain sorghum has proven to be a desirable component to the ethanol industry. While ethanol plants are enjoying record margins, the massive introduction of demand from China along with regional purchasers bidding up price have created challenges as plants seek to secure feedstock.
Mike Chisam, president of Kansas Ethanol LLC in Lyons, Kan., discussed the latest in ethanol and sorghum utilization with me in late March.
Kansas Ethanol is a 55-million gallon per year nameplate facility. A facility of that size will typically utilize around 18 million bushels of corn or sorghum.
“We have historically done more sorghum than corn,” Chisam says, whose plant’s feedstock blend percentage is typically 70 to 80 percent sorghum.
That has changed recently due to demand from China.
Starch conversion is a growing priority for the Sorghum Checkoff to make sure the feedstock remains viable. From an ethanol plant’s perspective, it is pure economics. What is the blend of grain that gets them to their lowest cost per pound of starch? That answer will dictate the blend percentage.
Kansas Ethanol expects to be at about a 50-50 sorghum/corn mix by mid-April 2014.
According to Chisam, nearly record low ethanol stocks across the country coupled with pressure on the nation’s rail system have created outstanding plant profitability.
As we head into peak driving season, steady drawdown on ethanol stocks will continue.
“Everybody is feeling pretty good.” Chisam says.