As sorghum cargoes turned back toward China on Friday, amid the most recent trade talks between China and the U.S., American farmers breathed a sigh of relief.
“Farmers nowadays, we operate in the global market. If we grow a product and if nobody is willing to buy our product, or we can’t get into a country, it affects us tremendously,” said Jeremy Brown, farmer and owner of Broadview Agriculture.
In April, the Chinese government announced anti-dumping duties against sorghum in the U.S., including a 179 percent import on the grain. This stopped all trade. On Monday, boats, redirected due to the tariff, were able to return to their initial destination in China.
“One of the boats sold to Spain had not quite gotten to Spain and they re-sold it back to China,” said Tim Lust, CEO of National Sorghum Producers (NSP). He called this action on behalf of China, a “goodwill gesture.”
Since Tuesday, sorghum prices increased by 30 cents a bushel, a notable increase in demand, according to Lust.
“The fact is our customers in China lost a lot of money. Our U.S. grain trading companies lost a lot of money, our grain farmers lost a lot of money, so everybody is cautious and taking slow steps… but we see that demand starting to come back,” he said.
While the anti-dumping regulation was in place, sorghum farmers looked toward alternative crops for planting, uncertain if there would be a market for sorghum, said Brown. When that regulation dropped and the tariff lifted, he said many farmers will plant the crop.
If the drought continues in West Texas, and the tariff deal didn’t lift, “this ground would have just been bare,” said Brown, because dry grains are ideal in these conditions.
