National Sorghum Producers and the Sorghum Checkoff launched a joint podcast, Sorghum Smart Talk, last October. The original premise behind the podcast was providing farmers relevant and timely information about grain marketing.

We have covered a lot of topics in four months, but our highest-rated and downloaded episodes still relate to the market. Sometimes, I feel like a broken record when I say it (and write every second month about it), but the fact is markets matter.

In mid-February, we invited Jun Jie, the single-largest buyer of sorghum on Earth, onto Sorghum Smart Talk. To no one’s surprise, the episode with the giant Chinese grain company quickly became our most downloaded ever. And while it would have been easy for the conversation to revolve around the trade war, negotiations came up for the first time at the very end of the episode — almost as an afterthought. Why talk about the trade war when the fundamental need for feed grains in China is almost insatiable?

Caveat: Until U.S. agricultural products begin moving back into China, theoretical long-term demand does not help farmers financially. Farmers are struggling, and to take advantage of this long-term demand, they have to survive today. This is why the Market Facilitation Program and others like it are so important, and we sincerely appreciate the Trump administration standing behind sorghum farmers in this difficult time. However, from a pure economic standpoint, rest assured, China’s demand is deep.

In 2015, China imported 358 million bushels of sorghum from the U.S., which during the podcast, Jun Jie confirmed was nowhere near enough to meet China’s full need for sorghum. To put this into perspective, in 2018, the U.S. produced a total of 364 million bushels. You read that right: China needs more sorghum than the U.S. can produce. Why? Protein.

Protein supply
According to the Food and Agriculture Organization of the United Nations, the daily supply of protein in grams per capita in China rose 148% from 1961 to 2013. Compare this with 15% growth in the U.S. over the same period, and our protein needs here may as well be static.

At current trends, China will overtake the U.S. in daily per capita protein supply by 2041. Combined with the size of China’s population, the amount of protein needed is staggering. How will they meet this need, now and in the future? No way around it: U.S. agricultural products.

Our relationship with China has been and always will be a win-win. Sure, we must re-open this market to reap the benefits, but economic reality dictates we will trade again.

So, what can farmers do in the short term, until we resolve the trade war? In my opinion, the most important thing they can do is position themselves to take advantage of short-lived positive moves of the futures market.

My longtime readers are likely tired of hearing me say it, but each spring for four years in a row, the December corn futures contract has moved into profitable territory only to quickly fall back into the $3.50-to-$4 range where it stubbornly remains for the rest of the year.

There are many challenges with taking full advantage of these moves, but small changes over time — buying a few put options here and selling a few bushels forward there — add up. I challenge you not to let any rallies this spring completely pass you by.

And long term? Buckle up. As dark as it may seem today, the world needs U.S. agriculture. It’s still an exciting time to be us!

Duff is a strategic business director for National Sorghum Producers. He can be reached by email at [email protected] or find him on Twitter @sorghumduff.