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Sorghum's New Sell

April 4, 2012
By: Jeanne Bernick, Top Producer Editor
sorghum 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.

p 16 Sorghums New Sell   Chart

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.

p 19 Sorghums New Sell   Pic
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.

Despite lower stocks and more land planted to corn, sorghum has been a go-to crop for many Southern growers in recent drought years.

"Sorghum fills a niche because other crops that are high in water consumption just don’t make sense right now," says Samuel Simmons, a sorghum farmer from Harlingen, Texas. A fourth-generation farmer, he typically grows 1,200 acres of sorghum each year.

"Grain sorghum provides a lot of unique opportunities," Simmons says. "I think it’s a market that will continue to grow as we find different venues for sorghum."

Monte Wright of Perryton, Texas, averaged 2" of rain during last year’s growing season and says sorghum worked with him instead of against him. Wright was a 2012 national sorghum yield winner despite the drought, averaging 188 bu. per acre.

"I don’t have the larger wells that other farmers have who raise corn, and sorghum is a life-saver in drought because of its tolerance," he says.

In parts of the Midwest, sorghum is gaining ground as a strong crop for rough soils. "They call our area Little Egypt because it is dry and humid," says John Scates of Sturgis, Ill. "Sorghum fits well on our soils."

Feed the World. Sorghum growers find hope in the continuous stream of new research and studies proving sorghum’s prowess as a superfood and a key to world food aid.

Tufts University recently released guidelines for food aid products, suggesting sorghum as a quality alternative grain to expand options in the food aid basket. K-State researchers are developing new sorghum products for developing nations. Many countries around the world do not accept genetically modified grains, making sorghum a good option.

In an era when dietary demands change quickly and water is scarce, sorghum is gaining ground.
"When I think about today’s economic, health and natural resources environment, it becomes very clear that sorghum is the crop of the future," adds David Thomas, a sorghum grower from New Deal, Texas.

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FEATURED IN: Top Producer - Spring 2012

 
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