The situation that American farmers found themselves in the last two years is similar to the plight facing Canadian canola producers
SAN ANTONIO, Texas — United States sorghum producers are elated that trade appears to be resuming with their largest customer.
The U.S. Department of Agriculture reported exports of 444,500 tonnes for the week ended Feb. 20. It is the biggest sales week for the commodity in four years.
“Of course it went to an unknown destination,” said Dan Atkisson, chair of the National Sorghum Producers (NSP).
“You can draw your own conclusions where that’s actually going.”
His conclusion is that it is heading to China, a market that has severely restricted imports of U.S. sorghum since a trade spat erupted in the spring of 2018.
“It puts some light at the end of the tunnel for us,” said Atkisson.
There are many parallels between the trials and tribulations U.S. sorghum producers have experienced over the last two years and those that Canadian canola growers are enduring.
Sorghum sales to China started to climb dramatically in 2013. By 2015, growers were exporting 80 percent of the entire U.S. sorghum crop to China.
That came to a grinding halt in early 2018 when a trade war broke out between the U.S. and China.
In February of that year, China launched an anti-dumping and countervailing duty investigation related to U.S. sorghum exports. In April it announced it was implementing a 178 percent preliminary duty on the commodity.
“We were the tip of the spear when it came to the trade disruption,” said Atkisson.
“The cash price of our crop at my farm dropped 90 cents (per bushel) over night.”
Profit margins for growing the crop instantaneously evaporated.
The NSP’s legal team submitted thousands of pages of documents demonstrating that U.S. sorghum was being fairly traded with China. That caused China to drop the investigation and eliminate the duty in May.
But in June, China placed a 25 percent retaliatory tariff on sorghum and many other U.S. agricultural products in response to the U.S. placing a 25 percent tariff on 1,102 Chinese goods. That tariff remains in place today.
Atkisson said trade with China slowed to a crawl until the two countries recently signed off on a two-year trade pact. China has implemented a tariff waiver process that appears to have sparked a resumption in exports.
It doesn’t hurt that Australia, the world’s second largest sorghum exporter, doesn’t have any exportable supplies of the crop due to prolonged drought.
“If you want sorghum in the global market you’ve got to come to us,” he said.
Atkisson has one piece of advice to pass along to Canadian canola growers.
“It is important to lean into your commodity organizations,” he said.
“Producer memberships, producer dollars and producer energy is what really made the difference in this case.”
That farmer engagement is what enabled the organization to successfully challenge China’s anti-dumping and countervailing investigations and to ensure sorghum got its fair share of U.S. Market Facilitation Program dollars.
The other lesson he wanted to pass along is that some good came out of the trade spat. NSP and the U.S. Grains Council were able to cultivate new markets in places like Spain, Vietnam, India and the Middle East.