National Sorghum Producers CEO Tim Lust says there is more opportunity for an increase in sorghum acres than indicated by the USDA 2020 Prospective Plantings report released in April.
“The Prospective Planting report released today by USDA indicates an [11%] increase in sorghum acres for 2020,” Lust said in a statement. “While we are pleased to see a projected year-over-year increase in acres, a lot has changed in our world since the surveys used to help formulate this report were taken in February, and we feel there is greater opportunity for increased sorghum acres in the United States for the 2020-2021 marketing year.”
When the analysis was conducted in February, sorghum prices did not reflect basis appreciation from export sales that occurred since that time, Lust said. Significant purchase activity by China, approaching 1 million metric tons over the course of the last 7 weeks, has driven basis improvements, he added, with those purchases accounting for roughly 10% of the sorghum produced last year.
Sorghum for export traded at near-parity to corn during the entire month of February, Lust’s statement said. In mid-April, sorghum for export commanded a 13% premium. These gains have been seen at interior country elevators, as well, with new crop basis gains of $0.20 to $0.40 in the two weeks from the end of March to mid-April.
“These sales and basis improvements are encouraging, and, if this pace continues, will lead to potential for significant farm profitability gains,” Lust said. “With these factors in mind, both domestic and international demand will continue to drive sorghum acres, and we want to assure our customers there will be a productive, high-quality sorghum crop in the United States for the 2020-2021 marketing year.
"We are committed to providing our growers with information they need to produce a high-quality sorghum crop and our buyers with the most updated information about the availability of U.S. sorghum.”Source: National Sorghum Producers, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.