China giving US farmers incentive to plant sorghum

China giving US farmers incentive to plant sorghum

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From WATTAgNet:

Farmers in the Southern Plains of the United States are seeing more incentive to plant sorghum this year.

Near the Gulf of Mexico, new-crop cash bids have been as much as $1.50 more than the price of corn, and, in Kansas, 30-40 cents more than corn.

The U.S. Department of Agriculture (USDA) estimates a 400,000-acre increase in sorghum planting this year, but that’s based on a model that may not include China’s forward purchases for the 2015-16 crop year. Nearly 300,000 metric tons have already been purchased by China and other unknown importers for the 2015-16 marketing year.

Halfway through the 2014-15 marketing year, sorghum export sales have already reached USDA’s forecast, 96 percent of which went to China.

The popularity of sorghum can be attributed to the dispute over biotech corn in China, but so too can better education of China’s livestock feeders on sorghum and Chinas import tariffs and quotas.

China imports about 10 million metric tons of feed grains each year, and has a system of tariff rate quotas (TRQ) that limit the quantity of certain grain imports. The TRQ for corn is 2.88 million metric tons, which leaves just over 7 million metric tons to be supplied by other feed grains, such as sorghum.

Sorghum: China Fueling the Need for More U.S. Acres – DTN

Farmers in the Southern Plains have a rare incentive to plant sorghum this year with new-crop cash bids as much as $1.50 above the price of corn at the Gulf of Mexico and 30 to 40 cents above corn in parts of Kansas. However, that’s based on a long-run model that may not include the magnitude of China’s forward purchases for the 2015-16 crop year.

Read more at Agfax

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