LUBBOCK, TEXAS - Sorghum producers are receiving an average of 15 cents per bushel more this week thanks in large part to their collaborative work through the National Sorghum Producers.
Last week, sorghum Loan Deficiency Payments (LDP) were discounted and were not realistically reflecting local market conditions. An effective LDP is important because it helps producers recover the difference between the cash price they receive for their grain and the loan rate.
NSP worked with producers and elevators in the impacted areas and analyzed cash price, loan rate and LDP data. NSP then presented this information and analysis to USDA and asked for quick action in correcting the deficiencies in the sorghum LDP. USDA made needed adjustments to how the payments are calculated. Producers than began realizing the bottom-line impact of the increased LDP.
Greg Shelor, NSP Vice-President for Legislation and a producer from Minneola, Kan. was in Washington, D.C. this week and talked with Kansas Representative Jerry Moran about the impact of the adjustments to his operation.
"Last Thursday, the cash price for grain sorghum in Dodge City was $1.52. With a loan rate set at $1.93, the LDP should have been the difference, which would have equaled 41 cents. But, because the regional LDP was set at 30 cents, I would have been discounted 11 cents on every bushel of grain I sold. Today, I have a 45 cent LDP and it's right on the money."
NSP President James Vorderstrasse of Hebron, Neb. said that having an association that works to pull together data from producers and elevators across a large geographic area was vital to making progress this week.
"NSP's work directly impacted the sorghum farmer's bottom line. Producers need to know that NSP is working on issues that are important to profitability in the sorghum business. NSP is making sure that we are not being put at an economic disadvantage to other crops."
NSP CEO Tim Lust said that he appreciated USDA's help in correcting the situation this week. "When presented with the facts, USDA rose to the occasion and made adjustments. We appreciate their timely attention to finding a workable solution for producers."
NSP represents U.S. sorghum producers nationwide. Headquartered in Lubbock, in the heart of the U.S. Sorghum Belt that stretches from the Rockies to the Mississippi River and from South Texas to South Dakota, the organization works to ensure the profitability of sorghum production through legislative representation, market development, research and education.