Sorghum sales to China are encouraging

U.S. Grains Council
Farm Forum

Large sales of U.S. sorghum to China are welcome news for U.S. farmers and agribusinesses, though the need remains for consistent market development work by the U.S. Grains Council (USGC) and sorghum industry partners to promote the coarse grain for feed, food and even beverages like baijiu, a traditional Chinese alcoholic beverage.

“China is a vibrant and complex market, and the United States and China are working through a number of sensitive issues, including trade issues,” said Bryan Lohmar, USGC director for China. “Our joint efforts with the United Sorghum Checkoff Program (USCP) to maintain relationships with our industry partners in China allowed exports to quickly resume as trade tensions eased with the signing of the phase one agreement. However, the work there is far from complete.”

The sorghum industry saw one of the largest export weeks in history with 445,000 metric tons (17.5 million bushels) committed for purchase during Feb. 28-March 5, the majority of which is destined for China. In all, purchases of 1.74 million tons (68.5 million bushels) of sorghum for the 2019/2020 marketing year are substantially ahead year-over-year and reaching more than half of the U.S. Department of Agriculture’s export target for sorghum with six months left in the marketing year.

The uptick in purchases directly follows the effective date for the phase one trade deal inked between the United States and China in January. The agreement includes a pledge to purchase up to $80 billion in agricultural goods over the next two years while also making structural changes that should provide U.S. grains and co-products improved access to the Chinese market over the long term.

On a macro-economic scale, the Chinese market holds immense growth potential for U.S. agriculture. China is the second largest corn producer and consumer behind the United States and, in the past, was the world’s largest importer of sorghum and distiller’s dried grains with solubles (DDGS). These feed ingredients supply the world’s largest swine, aquaculture and egg industries, the second largest poultry industry and growing dairy and beef operations.

The Council has been at the forefront of helping local producers in China for more than 30 years — assisting with the modernization of the swine industry, developing a dairy technical training center and offering other technical and logistical support. The Council has also supported officials at the U.S. Department of Agriculture and the Office of the U.S. Trade Representative in continuing trade negotiations on behalf of U.S. producers of feed grains, value-added products and ethanol.

These relationships are an important part of the Council’s work in China, especially as global responses to the coronavirus have slowed USGC programs in the country and as additional trade negotiations are expected in coming months.

“The Council and its sorghum industry partners led by USCP are intricately involved in the complicated trade relations between the United States and China,” Lohmar said. “Our steady presence and very broad engagement with Chinese industry and government before, during and after a period of high tariffs were critical to helping this market quickly revert to a robust export flow.

“We are committed to helping the United States remain a reliable supplier of grain products and ethanol to this market and others around the world.”