Grain-handling company Scoular tells Bloomberg that sorghum bids in the Gulf of Mexico have all but disappeared in the wake of a Chinese decision to impose a 179 percent tariff on U.S. imports.
Bob Ludington oversees the Omaha, Nebraska-based company’s grain and oilseed division, and says there’s been very little trade. While some U.S. grain elevators are still bidding for sorghum, he says, “Nobody is looking for it in the Gulf.”
China had been the biggest buyer of U.S. sorghum. Chinese officials announced there would be an investigation into American shipments back in February. At that point, sorghum prices dropped because of tariff fears, erasing the premium that the grain achieved over corn prices in states like Kansas.
Now that the Chinese tariff is in place, sorghum prices must drop in order to attract more domestic and international customers. Sorghum had recently been priced out of the U.S. animal-feed market because of strong Chinese demand.
Where excess supplies head now isn’t certain, but Ludington says Mexico is one potential destination.