Grain sorghum, it isn't just for livestock feed anymore. In fact, with development of special white, food-grade, grain sorghum varieties and continuing efforts to increase ethanol use across the country, grain sorghum may begin to take back some of the acreage it lost in Texas over the past 20 years or more.

Add the grain's value as a rotation crop for cotton and corn and the impetus may gain even more steam.

Price provides one of the first new incentives, says Wayne Cleveland, executive director of the Texas Grain Sorghum Association. “In 1970, grain sorghum prices stood at $2.02 per bushel. It was $5 per bushel in 1980, $1.84 in 2000, up to $3.70 in 2001, $3.90 in 2002 and could hit $4 per bushel this year, including loan rates etc.

“We think grain sorghum acreage in the state has hit bottom and bounced,” Cleveland told a group of Denton County, Texas, farmers recently.

“In the 1970s we were planting 8 million acres, but successive farm bills hit us hard and acreage declined to 3 million. In the meantime, yield and price were stagnant.”

Cleveland said one of the big coups for grain sorghum in the Farm Security and Rural Investment act of 2002 was obtaining a loan rate equal to corn. After much back-and-forth negotiations with the increase in and out of the bill, the final version made corn and grain sorghum equal.

That amounted to about a 26 cents per bushel increase, Cleveland said. “We think that's significant.”

Another significant factor affecting sorghum's future in the Southwest will be the potential growth of the ethanol industry.

Cleveland sees ethanol as a potential “significant growth opportunity. Ethanol requires a starch. Making ethanol is basically manufacturing alcohol. A manufacturing plant that produces 30 million gallons of ethanol requires 11 million bushels of grain sorghum.

The obstacle in Texas is the cost of building manufacturing plants. “Other states provide incentives, up to 20 cents per gallon, to build ethanol plants,” he said. “Texas does not. But we are asking the Texas legislature for that incentive.”

He said 46 million bushels of grain sorghum went into ethanol production in 2002, 12 percent of the year's total crop. A by-product, distiller's grain, also provides a valuable feed source for livestock. “It's 36 percent protein,” Cleveland said.

Catalysts driving ethanol acceptance include those tax credits in some states that boost production.

Also, Cleveland said California's ban on MTBE additives in gasoline last year opens a market for ethanol, which would go into fuel at 10 percent. “It helps gasoline burn cleaner and hotter.”

He said 16 states currently restrict use of MTBEs, which pose serious environmental problems. “Other states are considering restrictions. Texas currently has none.”

Cleveland said a federal ban on MTBEs could mean entry into a significant market. “We need to promote use of renewable fuels and eliminate the high cost boutique blends.”

He sees ethanol industry growth as rapid and steady. “Most plants are going up in the Midwest, partly because of the amount of grain produced in the region. State incentives also help.”

One plant currently operates in Portales, N.M. “We have none in Texas but two are under consideration,” Cleveland said.

National impact could be significant. Income for farms could jump by $4.5 billion, Cleveland said. That improves the tax base. Improvements to a local economy could be as much as $19 million.

Cleveland said increased focus on ethanol use also offers the United States an opportunity to break away from reliance on foreign fuels. “Last year, we imported $312 million worth of oil per day. We're dependent on imported oil and that's a hard cycle to break.’

Cleveland said food uses, including snack foods made from white sorghum, also offer opportunities for growth. Japan, he said, has used white sorghum flour for a variety of snack foods because of its ability to take on various flavors.

“It's bland and has no flavor of its own, so they can add most any flavor,” he said.

A huge state budget deficit will be a major hurdle to get additional incentives for Texas growers, Cleveland said.

“They're facing a $10 billion deficit, not $5 billion as they had anticipated. Every agency will take cuts. Still, we're going to them asking for an incentive for ethanol. We will be involved. Government can either do something for you, or to you. It's your choice.”

Cleveland said agriculture had not been as involved in government in the past as it should have been. “We're going to push,” he said.

rsmith@primediabusiness.com