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)
Population increases and a surge in income have led to a demand for a higher grade of protein, he said. Given the natural freight advantages in the Sorghum Belt, especially in Texas, U.S. sorghum is well positioned to supply Mexico with grain.
Nick Pinkston and his family farm grain sorghum, cotton and corn in Sinton, Texas. In a normal year, Pinkston would already have a portion of his new crop contracted. However, the 2012 crop is anything but normal.
"The majority of my grain sorghum crop is sold at the Port of Corpus Christi or to merchants in the Rio Grande Valley," Pinkston said. While he is not excited about the long-range weather forecast, which calls for a dryer than normal weather pattern into summer, he is energized by reports of strong opportunities to sell his grain sorghum in Mexico.
Miller says the dry conditions prevalent along most of the Texas coastal region should keep new-crop basis levels stronger relative to the past few years. In fact, basis levels should remain strong unless suddenly significant amounts of rain fall across Texas. This is despite better growing conditions in Northern Mexico since overall North American supplies are still tight by historical standards.
Miller said since the U.S. is Mexico’s closest exporter of sorghum, Texas will again be an important source of feed grain. One of the best ways for Texas to be an important player in Mexico is to have a crop.
“Once cross-border merchandisers see supplies developing in the field in the U.S., competition will start to develop and basis levels should firm quickly after harvest,” he said.
With at least modest amounts of moisture before planting, farmers will start thinking about the water demands of an entire season, Miller said. This can often lead to choosing more sorghum relative to cotton or corn across the South Plains on non-irrigated acres.
“On these same acres with no new rainfall,” Miller said, “farmers along the middle and lower coastal areas of Texas are weighing crop insurance programs for sorghum relative to cotton. With the crop insurance price election for cotton at 91 cents per pound and sorghum at $5.82 per bushel, farmers are looking at possible payout outcomes at their respective yields.”
For more information on the United Sorghum Checkoff Program call (806-687-8727).