Bad weather in E.U. helps U.S. crop

While here in America we’ve been focusing attention on bad weather in North America — drought in the West, floods in the Midwest, and hurricanes pounding Mexico — bad weather across the ocean may benefit American crops.

The U.S. Grains Council in a press release today said bad weather in the European Union countries has led to increased sorghum markets for the U.S., especially in places like Spain and Italy.

It was also noted that three decades after sorghum was introduced there, the Spanish and Italians are rediscovering their taste for it.

“Kurt Shultz, U.S. Grains Council director for the Mediterranean and Africa, reports Spain has imported 588,100 metric tons (23.1 million bushels) of sorghum since Sept. 1, 2006, through Aug. 9, 2007 — nearly 10 times that country’s sorghum imports for the same period a year ago.

“Italy, which did not import sorghum from the United States in 2005/06, has also rediscovered a taste for U.S. sorghum, importing 38,400 tons (1.5 million bushels) from the United States since the marketing year began in September…” said the news release.

“Drought in eastern Europe and heavy rains in France and the United Kingdom have dramatically reduced grain production in the European Union (EU), leaving the bloc with a record low level of grain stocks of about 2 million tons, mostly in Hungary. …”

The grains council explained the Spain has a large livestock industry and can’t find the feed it needs currently because of all the bad weather in the E.U., and expects the sorghum market to continue to grow for the next 6 months.

“The high price of feed ingredients in the E.U. is going to put pressure on those governments as food prices are expected to go up 30 to 40 percent due to the grain shortage,” says Dale Artho, USGC chairman and a sorghum grower from Texas, also said in the press release.

Another reason is also affecting the shortage of feed for livestock overseas.

Artho said E.U. biotechnology restrictions “have largely eliminated U.S. corn and corn products as options for the feed industry there, further exacerbating the situation. The E.U. imported approximately 3.1 million tons of corn co-products in 2005 prior to the E.U.’s embargo on biotech products,” said the release.

One of the reasons the U.S. will capitalize on the need for sorghum overseas is because America is the top producer of sorghum in the world (the sorghum is mainly grown in the Midwest and Texas): grain sorghum is also the third most important cereal crop in the U.S., and fifth most important cereal crop grown in the world, according to the grains council.

“The United States is currently positioned as the number two producer and number one exporter of sorghum on the world market. The United States’ share of world trade in sorghum has not dropped below 70 percent in more than a decade,” explained the grain council’s website.

In the 2005/2006 year, the breakdown of customers for the U.S. was: Mexico, 69 percent; Japan 27 percent; Spain, 2 percent; and other countries making up the rest of the buyers.

Ultimately, weather always plays the final factor on what happens to supply and demand when it comes to crops.

It will be interesting to see the final breakdown on sorghum numbers in the next year.

Technorati tags: Agriculture
sorghum
U.S. Grains Council