Jun 7, 2019
What a difference a week makes.
As May turned into June, continued wet weather and flooding in many areas caused the clock to run out on many farmers who had intended to plant corn this year. The resulting expectation of a short corn crop triggered a corresponding rally in grain prices, which now makes it more likely an alternative grain — sorghum — could pick up more acres this year.
Sorghum can often be substituted for corn in feed and fuel applications.
“The 50 cent rally we’ve seen makes a huge difference for producers in their profit-and-loss statements,” said Jordan Shearer, executive director of the Colorado Sorghum Producers.
Grain sorghum is already an important crop in Colorado, especially in the southeast, accounting for 310,000 acres of production statewide last year.
Mike Brooks farms in Baca County, which produces more sorghum than any other county in Colorado.
“We raise a lot of sorghum in this area, and I would expect sorghum acres this year to be normal or maybe even a bit above normal,” he said from his tractor earlier this week. “In the Texas panhandle and in Oklahoma, they have the option to go to cotton when the price is favorable, but we don’t have that option here.”
Sorghum’s long planting window makes it ideal for farmers struggling with unusually wet planting conditions this spring, according to Shearer, who was replanting cotton on his own farm near Laverne, Okla., before switching over to sorghum.
Grain sorghum can be planted up until around June 10 in northeastern Colorado, June 20 in Baca County and as late as the July 4 holiday in western Oklahoma.
Shearer said his area received 12 inches of rain in the month of May alone, a significant amount but still far less than the deluge in central and eastern parts of the state that caused rivers to flood, putting dams and bridges at risk.
He was also about six miles from a tornado that leveled one farm as an unprecedented caravan of storms camped out over the Central Plains in late May.
All that water and stormy weather has made it hard for many farmers to finish planting in a timely fashion. In some cases, they are being forced to replant or take the prevented planting insurance option.
According to a recent Farm Journal survey, nearly one-third of all corn farmers said they would file prevented planting claims on at least some of their acreage.
Brooks, who farms with his dad and brother near Walsh, said they finished planting around 4,500 acres of dryland corn just prior to the crop insurance deadline.
“We had an extremely wet May, and that’s what put us back near the end of the planting window,” he said.
Farmers who can’t get corn in and take the prevented planting option are likely to plant non-insurable sorghum to take advantage of good soil moisture, he said.
“Another benefit of milo in that situation is it’s more heat resistant than corn,” Brooks said.
Sorghum seed is also a relative bargain compared to other crops, helping to reduce financial risk.
Another option — to summer-fallow the ground and wait to plant wheat in the fall — could penalize farmers by forcing them to forfeit trade aid payments announced by the Trump Administration in May, both Brooks and Shearer said.
The second round of market facilitation payments, estimated at $16 billion, was proposed when trade talks with China collapsed abruptly last month. This time, payments are to be calculated based on a formula related to planted acreage rather than on crops harvested.
“As I understand it, if the farmer plants a crop, he’s going to get a payment, as long as it’s a Title 1 crop, or alfalfa, and certified through the local FSA office,” Brooks said.
The first round of payments drew criticism because it left out many farmers who suffered losses due to natural disasters. Farmers in Colorado were particularly hard hit, since hail devastated many farms last year.
Last year was tough on Colorado sorghum, too. The 2018 production came in at 12.71 million bushels, down 38 percent from the previous year. The average grain yield was 41 bushels per acre, the fourth lowest in the last 10 years.
Among variety trials conducted at four sites in eastern Colorado — Akron, Burlington, Sheridan Lake and Walsh — only the Akron site could be harvested for grain.
Agronomists at Colorado State University attributed the plot failures to exceptionally dry conditions at planting, which made it difficult to get a decent stand.
The year before that, however, dryland sorghum plots at Walsh’s Plainsman Research Center produced over 100 bushels to the acre, Brooks recalled, proving that recent growing conditions have been relatively favorable.
“In our general area, I think we’ve been very blessed the last four years,” he said. “We’ve had terrible corn and milo prices, but as a region we’ve out-produced the bad prices.”
By contrast, the memory of recent droughts has made the challenges associated with a wet spring more bearable, he added.
“I would take this spring over last spring any day,” Brooks said.
Baca County doesn’t typically diversify much beyond wheat, sorghum and some dryland corn on the sandier ground. But in other areas, many farmers still have the option of planting soybeans, which also have a wide planting window, Shearer said. Beans have been hit hard by the Chinese trade dispute, however, and tend to suffer yield drag when planted back-to-back rather than rotated with other crops, he noted.
Agronomists say rotating sorghum with soybeans, cotton and corn benefits subsequent crops, since it can penetrate compacted soils and reduce diseases and nematodes that build up in the soil.
Even though the Chinese dispute is ongoing — and China has been a critical export market for grain sorghum in recent years — the short corn crop makes all the difference when it comes to how market dynamics are changing.
Though there’s little sign a new deal with China will materialize anytime soon, the reality is domestic and world markets still need grain to meet their feed and fuel needs, Shearer said.
The National Sorghum Producers reported recently that, in spite of tariff restrictions, the U.S. has sold multiple vessels to China over the past month.
“Despite trade uncertainty, demand for feed grain remains strong across the globe,” said National Sorghum Producers CEO Tim Lust in announcing the recent sales. “Furthermore, anticipated feed grain shortages from areas impacted by adverse planting weather will create significant localized demand for additional starch sources like sorghum.
“We continue to receive feedback from ethanol plants and other end-users about the need to fill gaps in supply this winter. Some have already posted sorghum bids, and others are strongly considering doing so.”
Brooks has seen evidence of those developments in the local cash price, which is about 60 cents per bushel higher now than at harvest time last fall. And he expects to see lots of sorghum planters running in surrounding fields in the coming weeks.
“We have a full soil moisture profile, and things are looking good,” he said.
Original post on Ag Journal