Sorghum Prices Explained

Sorghum prices remained high as warming weather affected its key producing countries’ output. Also, the rising demand for gluten-free and non-GMO products because of sustainable and health-conscious buying patterns helps its market growth.

In demand-based applications, the expanding nutrition-based feed for livestock and increasing utilization of plant-based biofuel as an alternative to fossil fuel will provide significant market profitability for this commodity.

Why are sorghum prices fluctuating?

1. Supply and Diverse Market

The United States is the largest sorghum producer worldwide, averaging about 11.4 million metric tons yearly. However, its production slowly decreased as the country suffered consecutive droughts and strong hurricanes that diminished its output.  

In contrast, Brazil expects a bumper harvest due to improved weather conditions and government initiatives that boost its cultivation. On trading activities, China opened its market for Brazilian sorghum (an unusual move as Brazil hardly exports this commodity). 

China is the largest sorghum importer (88%), mostly from the U.S. Thus, this new deal challenges the latter’s fluidity in Chinese markets.

2. Demand from Top Industries

The animal feed industry is the primary consumer and price driver of sorghum. Its consumption accounts for approximately 60% of its global production. For example, the Chinese livestock, aquaculture, and poultry industries indicate a stable market. Additionally, its sorghum imports are projected to increase by 125.7 million bushels.

Furthermore, the biofuel industry is another significant sorghum consumer, utilizing it for ethanol production. Its suitability for various biofuel production processes earns solid sustainable credentials in the fuel sector. Thus, these huge appetites from two big industries will highly cause sorghum price volatility.

3. Friendly-Production Costs

Compared to cotton, corn, and soybeans which require $450-$600 capital for every acre, sorghum production averages $340. Additionally, its seed costs generally range from $5 to $18 an acre for most growers. Furthermore, the crop only takes six inches of total water from soil, rainfall, or irrigation to produce the first bushel of grain.

Thus, its ability to thrive in low water levels is a resource-conserving quality that saves money for farmers. Overall, the plants’ drought-efficient quality makes it easy for cultivation resulting in the sprouting of small-time sorghum growers. This availability will likely contribute to its prices in the future.

Which variables impact the price of sorghum?

• Supply and Diverse Market
• Demand from Top Industries
• Friendly-Production Costs
• Weather Conditions
• Currency Rates

Where does sorghum come from?

Sorghum is a versatile cereal grain that originated in Africa, likely in Sudan and Ethiopia. It has been cultivated for thousands of years and grows in tropical and subtropical regions around the world such as Africa, Asia, Latin America, and parts of North America.

Additionally, it is the fifth most important cereal in the world. Its industry applications include biofuel, alcohol, food, and livestock feed.

Sorghum is a relatively low-maintenance crop, making it well-suited for cultivation in areas with limited resources or challenging environmental conditions. Furthermore, it is adaptable to different types of soils and can withstand drought, heat, and salinity.

1. Land Preparation – The land is cleared, tilled, and leveled to create a suitable seedbed.

2. Planting – Its seeds are typically planted in rows, with spacing in between. Additionally, planting depth is important as too deep or too shallow affects germination and seedling emergence.

3. Fertilization – Sorghum requires adequate nutrients for optimal growth and yield. Thus, fertilizers are applied before or after planting, depending on soil conditions and nutrient requirements.

4. Weed Control – Weeds compete with sorghum for nutrients and water, so weed management is essential. This involves mechanical weeding, hand weeding, or the use of herbicides.

5. Irrigation – Sorghum grows in dry conditions, however, it requires supplemental irrigation during periods of extended drought. The amount of water needed varies depending on the variety, climate, and soil conditions.

The timing of harvesting changes according to the cultivating region and its variety. Generally, grain sorghum is harvested when the grains reach full maturity, indicating a hard, dry texture, and a golden brown color. Conversely, forage sorghum is reaped earlier when the plants are still green and leafy.

1. Cutting – Sorghum is harvested using manual methods such as sickles or combined harvesters. The cutting height depends on the intended use of the crop.

2. Threshing – Threshing separates the grains from the rest of the plant material. This is done manually or mechanically.

3. Drying – Sorghum grains are dried to a safe moisture content before storage to prevent spoilage and mold growth. Drying includes natural air drying or mechanical drying using fans or dehydrators.

4. Storage – After drying, sorghum grains are stored in silos, bins, or other airtight containers to protect them from moisture, pests, and rodents. Proper storage ensures the quality and longevity of the grains.

What is the future price of sorghum?

Its versatility and sustainability gained prominence in diverse applications. Thus, sorghum prices in 2030 are estimated to range between $250 and $300 per ton. Despite the dynamic nature of global markets, market analysts forecasted its elevated prices due to these opportunities:

Emerging Markets – The increasing awareness of its nutritional benefits opens chances to emerging economies such as food-processing and nutraceuticals. Also, the livestock industry recorded increased usage of this commodity in their feed ingredients.

Biodegradable Plastics – Sorghum’s high starch content and drought tolerance make it a promising feedstock for biodegradable plastics, offering a sustainable alternative to conventional plastics.

Pharmaceutical Applications – Research is exploring its potential in the pharmaceutical industry as its bioactive compounds have therapeutic properties for various health conditions.

Biofuel Production – The biofuel industry is expected to continue utilizing sorghum for ethanol production. Its suitability for various biofuel production processes and sustainability credentials contribute to its demand in this sector.