While it is normal for US sorghum prices to follow corn markets, the strength of global sorghum markets currently has US Department of Agriculture's farm price estimates for sorghum slightly higher than those of corn in 2010/2011.
Although sorghum acres have moved lower over the last decade, US sorghum exports have remained stable, making exports a more important component of sorghum prices overall, according to Erick Erickson, US Grains Council special assistant for planning, evaluation and projects.
“Sustaining exports is critical to sustaining sorghum prices,” he said. “Additional support from Council members like the United Sorghum Checkoff Program allowed us to support key markets in Mexico and Japan, but also bring along emerging markets in Morocco and Egypt.”
Council programs in Morocco in 2010 on sorghum processing and its value in feed rations led to sales of 4.8 million bushels of US sorghum to Morocco during the marketing year. No US sorghum was sold to the North African country the year before.
At the same time, exports to Mexico remained steady, sales to Japan more than doubled, Israel entered the market and Egypt began looking at US sorghum as an option.
“Exports are very important for U.S. sorghum producers, and we’ve seen some success in growing markets in new regions,” said Dr. Virgil Smail, executive director of the Sorghum Checkoff.
“The strength of exports supports sorghum prices, which in turn makes sorghum more attractive to farmers and those looking to invest in the crop.”
Continued strength in exports contributed to USDA’s January estimate that on farm sorghum prices will average $5.50 per bushel in 2010/2011, ahead of the $5.30 per bushel estimate for corn.