2019 Outlook: Prices Could Rise as Sorghum Acres Hold Steady

December 7, 2018 03:41 PM
 
Sorghum sits quiet in the background while trade negotiations with China continue. Prices and overall acres are projected to hold relatively steady, despite tariffs and additional challenges.

Sorghum sits quiet in the background while trade negotiations with China continue. Prices and overall acres are projected to hold relatively steady, despite tariffs and additional challenges.

“I don’t expect a big shift in acres,” says Brad Cowan, Texas A&M University Extension county agent. “We need that crop in our rotation with the other crops we grow. We’ve had challenges the past several years with sugarcane aphid—added cost producers need to consider.”

It’s been a wet fall in many sorghum-producing states, which replenishes deep soil moisture and prevents farmers from planting wheat. Both factors could encourage sorghum acres in some states, such as Kansas.

“Wheat acres are down from late-season rain therefore sorghum acres will be up,” says Pat Damman, field director with Kansas Grain Sorghum. Some farmers in the western part of the state might take soybeans out of their rotation and 2018’s sorghum yields were exceptional—both factors that could encourage an increase in grain sorghum acres in Kansas, he adds.

Cotton is another important crop to watch in relation to sorghum acres.

“What is cotton doing? For example, 2018’s cotton prices were high during planting and that took many sorghum acres locally,” Cowan says.

Ultimately, price is what will drive most farmer decisions.

 “My price outlook for feed grains is for marginally higher prices than 2018,” says James Welch, Texas A&M University economist. “Up to $3.50 to $4 on sorghum. A few other buyers have emerged but use for feed and fuel looks to be picking up the slack. Lifting the tariffs would be positive for the grain complex—I’d add 20¢ to my price outlook.”

Trade is the wild card still looming in the minds of many farmers.

“For a couple years about 80% of our sorghum went to China,” Dammen says. “We have now re-engaged with Mexico—they’re buying the majority of our crop. We’re also exporting to Peru, the Middle East and other non-traditional partners.”

He says they’re also in discussion with representatives from Spain, Portugal, Egypt and Saudi Arabia, but they’re still holding out hope exports to China will be an option in 2019. Sorghum for ethanol is on the rise, too.

“Right now, ethanol plants are 80% sorghum in Kansas,” Dammen adds. “We use a lot of sorghum domestically, like for pet food, and we’re still in the China liquor market despite tariffs.”

Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close