Sorghum's New Sell

  

Demand from dietary shifts helps boost sorghum value

Nothing is more valuable than our daily bread, and where there’s value, there is a business opportunity. As consumers change their dietary habits, sorghum is gaining new value.

One in 133 people in the U.S. has celiac disease—an auto-immune disorder that affects digestion. Sufferers of celiac disease have to avoid all gluten in their diet. Wheat, barley and rye contain gluten, and they are found in a majority of foods. Sorghum, however, is a viable gluten-free alternative to these grains.

The gluten-free market has soared in recent years and is likely to receive another significant boost as the nation’s largest food firms jump on the bandwagon following FDA officially acknowledging "gluten-free." Most gluten-free products are alternatives to traditional grain-based goods, including bakery products like pasta and cereals. Since 2001, the market for gluten-free products has grown at an annual rate of 25%, according to Packaged Facts, a bakery industry publication.

Meanwhile, the global market for gluten-free products is expected to reach more than $4.3 billion within the next five years, representing growth of $1.2 billion, according to a Datamonitor report entitled "The Future of Gluten-Free: Consumer Insight and Product Opportunities."

Archer Daniels Midland introduced a sorghum flour to the market in 2010, intending to provide

lower-cost use for gluten-free applications. DuPont sees the increased focus on food and nutrition as a major sales driver for the company, with annual sales growth in its nutrition division expected to hit 7% to 9% in 2012, strengthened by the acquisition of food ingredient company Danisco. DuPont’s Pioneer Hi-Bred recently entered into an agreement with Advanta, a leading sorghum developer.

Not only are people self-diagnosing wheat or gluten intolerance, an additional group of consumers simply believes that avoiding gluten is a healthier way of eating. The shift—mostly by middle- to upper-class consumers—is driven by the belief that certain major allergens and food components play a role in exacerbating other health conditions, such as migraines.

Sorghum grower Earl Roemer of Scott City, Kan., eyes sorghum varieties that will be milled at his Nu Life Market sorghum mill and processing plant.

"The new interest in gluten-free and healthier food products is the biggest market spur sorghum has seen in years," says Earl Roemer, a Scott City, Kan., sorghum grower and CEO of Nu Life Market, a sorghum milling company.

Roemer has watched the sorghum market rise and fall over his farming career and is betting the bank on consumer dietary changes reshaping sorghum demand. As part of his commitment to produce and deliver high-quality sorghum flour, he has invested in Nu Life, which will produce 6,000 lb. of sorghum flour per hour once the mill is completed this spring and employ more than 15 people in Scott City. Within a 50-mile radius of the mill, average sorghum production exceeds 30 million bushels.

"This is sorghum’s chance to shine, to give consumers what they need," Roemer says.

Will Supply Stand? In the U.S., sorghum is grown in 14 states, with Kansas and Texas historically ranking as the top two sorghum-producing states. But sorghum has had a tough row to hoe. Grain sorghum is competing with corn, which is gaining acreage and subsequent productive capacity at the expense of grain sorghum and other crops, notes Daniel O’Brien, an Extension agricultural economist at Kansas State University (K-State).

On a year-to-year basis, marginally larger grain sorghum production and total supplies, as well as changes in prospects for U.S. grain sorghum exports (down) and food seed and industrial usage (up), have left projected U.S. ending stocks of grain sorghum flat.

"A fundamental lack of available supplies is leading to reductions in U.S. grain sorghum usage in several major industries," O’Brien notes.

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