What is in this article?:
- Mexico market offers opportunity for South Texas grain sorghum
- Freight advantages
- Regions like the Rio Grande Valley and the Texas Coastal Bend are well positioned to increase sorghum acres.
- Mexico is one of the most important markets for U.S. sorghum.
- U.S. sorghum is well positioned to supply Mexico with grain.
SORGHUM ACREAGE could increase in South Texas as farmers look to a more drought tolerant crop. And the close proximity to Mexico bodes well for marketing. (Photo courtesy United Sorghum Checkoff Program)
With the La Nina weather pattern expected to continue, the South Plains of Texas once again seems susceptible to drought. Given the natural drought tolerance associated with sorghum and demand opportunities from Mexico, regions like the Rio Grande Valley and the Texas Coastal Bend are well positioned to increase sorghum acres.
Purchasing more than 78 million bushels of grain sorghum annually, Mexico is one of the most important markets for U.S. sorghum.
"Mexico is the predominant price driver for U.S. sorghum,” says Kevin Roepke, manager of International Operations for the U.S. Grains Council. “In any given year, Mexico alone accounts for roughly 25 percent to 30 percent of U.S. sorghum exports."
While the drought has affected numerous sorghum growing regions, particularly Texas, there is a potential silver lining for the 2012 sorghum crop. John Miller with Southwest Ag Consulting believes the strong demand for U.S. sorghum in Mexico will return as new crop supplies become available.
"The demand for sorghum by Mexico should increase given that the U.S. market is coming off a severe drought in 2011, even despite some recent rains that could boost production,” Miller said. “The drought, coupled with the U.S. running low on sorghum, helped to create high basis levels for corn. Therefore, the Mexican sorghum market should be primed for taking new sorghum supplies."
This return to the U.S. market has begun anywhere from late July to late October, after Mexico end-users utilize grain grown in their own country. In addition, Mexican users appreciate that U.S. sorghum is harvested at a moisture and quality level well-suited to their needs.
In January, the U.S. Department of Agriculture reported sorghum exports were down with sluggish export sales. However, Roepke said demand for grain sorghum continues to be and will always remain strong. That is particularly true in Mexico where the crop is considered by many Mexican livestock producers as the optimal grain for feeding livestock.
“Many people don’t realize it, but after China, Mexico is projected to be the largest growth market for U.S. grains during the next 20 years,” Roepke said.