Over sorghum salad, U.S. farmers and Chinese buyers chew on trade – Metro US

Over sorghum salad, U.S. farmers and Chinese buyers chew on trade

Over sorghum salad, U.S. farmers and Chinese buyers chew on trade
By Michael Hirtzer and Tom Polansek

By Michael Hirtzer and Tom Polansek

CHICAGO (Reuters) – Chinese importers of the livestock feed sorghum feasted on tabbouleh salad and chipotle tortillas made with the U.S. grain at a Texas barbecue this week, as farmers try to woo buyers in the middle of an escalating U.S.-China trade war.

Despite the overtures to the world’s top sorghum buyer, no deals were struck over the meal, held at the home of the head of the Texas Sorghum Producers. The normally brisk sorghum trade between the two countries has ground to a halt as tensions mount between Washington and Beijing.

Chinese buyers, who normally buy 90 percent of their sorghum imports from the United States, stopped purchasing due to concerns a tariff would be imposed and drive up the cost of shipments.

On July 6, that fear became reality when Beijing included sorghum in a list of U.S. exports to face levies in retaliation for U.S. tariffs on Chinese goods.

In rural Texas, the executive director of the producer group, Wayne Cleveland, hosted the Chinese delegation for a beef brisket barbecue at his home.

Also on the menu were tortillas made from sorghum – rather than wheat or corn – and duck, which is fed sorghum in China. In addition to its use as an animal feed, sorghum can form the base of gluten-free foods. In China it is used to make a fiery liquor called baijiu.

The atmosphere at the meal, part of a trip organized before Beijing implemented tariffs, was friendly as buyers enjoyed a view of the starry night, Cleveland said.

But there was little talk of the politics that has disrupted trade between the two sides, he said.

The loss of Chinese buying has pushed sorghum prices lower and hurt farmers in Texas. Sorghum is widely grown because it is a hardy crop that can withstand the hot climate.

“We need that market back,” Cleveland told Reuters.

Florentino Lopez, executive director of the United Sorghum Checkoff, an industry group, said Chinese buyers who attended the dinner were concerned about the longer-term impact of the trade war. They wanted to know if U.S. farmers may cut back on sorghum plantings, which could tighten supplies available for sale next year even if Washington and Beijing resolve their differences.

“They are looking forward and being prepared for when they can actually make some purchases,” Lopez said.

Sorghum was one of the first casualties of the U.S.-China trade war. China launched an anti-dumping probe into sorghum in February in response to U.S. tariffs on solar panels and washing machines.

Chinese buyers have bought no significant volumes since then, according to U.S. Department of Agriculture data. In 2017, they bought about $839 million of U.S. sorghum, most of which was shipped in the months after the autumn harvest.

Both sides were frustrated by the impasse.

“I want to sell and they want to buy,” one trader said.

A Chinese sorghum buyer not participating in the trip told Reuters that buying would restart if U.S. prices fall lower.

“We will definitely buy when prices are at a reasonable level, even with the 25 percent tariff,” the buyer said.


Colin Chopelas, who farms near the Texas port of Corpus Christi, finished harvesting his sorghum fields three weeks ago. His crop is in a grain elevator awaiting buyers.

Demand has taken a further hit because Mexico, another big market for U.S. sorghum, has been canceling sales, USDA data showed on Thursday. An abundance of other available feeds, especially U.S. corn, was also limiting interest in sorghum.

“Mexico is always an option, but they are not going to pay what we would typically get going to China,” Chopelas said. That has pushed down prices.

An elevator operated by global grains merchant Archer Daniels Midland at Corpus Christi was bidding roughly $3.68 per bushel to buy sorghum. Earlier this year, sorghum there fetched as much as $4.80 per bushel, according to Reuters data.

The Chinese delegation, which Sorghum Checkoff said represents importers that account for more than half of China’s total sorghum imports from the United States, will travel to Kansas next week. ADM and Gavilon, a unit of Marubeni Corp, said they are participating in the trade mission.

Cargill Inc will also attend, participants and other sorghum traders said. Cargill had no comment.

ADM said in May it would take a $30 million hit to its second-quarter trading profit related to disrupted sorghum shipments.

At a tour of an Attebury Grain facility in Saginaw, Texas, the Chinese importers said they still want to buy U.S. sorghum but are worried about the tariff making deals too expensive, said George Gurganus, a grain buyer for Attebury Grain who met the group.

With China’s demand down, Gurganus is searching for alternative markets. “We’re looking at every other outlet we can find,” he said.

(Additional reporting by Hallie Gu in Beijing; Editing by Caroline Stauffer and Leslie Adler)

More from our Sister Sites