According to results of a survey recently funded by the United Sorghum Checkoff Program (USCP), 29 percent of 2009 grain sorghum production will be used to produce ethanol. The expected demand for sorghum to produce ethanol in 2009 is 136,979,000 bushels. Demand for sorghum will remain steady at 136 million-plus bushels, while the percent of the U.S. sorghum crop included in ethanol will increase slightly in 2010 because total U.S. production will be lower this crop year.
USCP Board Chairman, Bill Greving says this is very exciting news for the sorghum industry. “This study shows what we have always known, that sorghum ethanol yields are comparable to corn. In the past year, the price differential has greatly benefited the bottom line of ethanol plants using sorghum as a feedstock,” said Greving. “This means that the use of sorghum by ethanol plants has influenced the increased demand for sorghum in these areas where ethanol plants are co-located with sorghum production.”
The research, conducted by Agri-Energy Solutions, Inc. (AES), determined the amount of sorghum used to produce ethanol in the United States and studied other issues that affect the current ethanol market share of sorghum. The study provided USCP with the most current data concerning the use of sorghum to produce ethanol, any obstacles facing the increased use of sorghum in ethanol and possible solutions to removing those obstacles.
The increase in usage of sorghum by ethanol plants in the past two years is a significant step towards the USCP strategic goal of increasing the use of sorghum in the ethanol industry by 50 percent by 2011. Only slight increases in demand could mean half of the Kansas sorghum crop could be used to produce ethanol in 2010. It also means more than a third of Texas’s sorghum crop will likely be used for ethanol production. Realizing that slightly less sorghum is expected to be harvested in 2009 because of crop losses in some areas, ethanol plants are aggressively moving to secure their sorghum supplies early for 2010 production.
The research suggests immense growth opportunities for sorghum because the majority of the ethanol plants in the primary target area are less than three years old. It also suggests there is an emerging market opportunity for sorghum now and in the near future as this market matures.
According to this survey, ethanol plants in areas where sorghum is grown prefer to use sorghum because of its availability and favorable price differential. It also suggests if grain prices jump like they did during 2007, 2008 and early 2009, demand for sorghum will increase dramatically, which will mean even more sorghum could be used in ethanol blends. Feedback from the survey indicates the more experience the ethanol industry has with sorghum, the more likely it is to include sorghum in future production plans.
Sorghum for grain-based ethanol production qualifies as an advanced biofuel feedstock and fits current U.S. policy to reduce dependence on foreign oil without impacting food supplies. The use of sorghum by ethanol plants in the Great Plains region means that producers have a reliable and growing market.
AES divided the ethanol production industry into three target areas, focusing primarily on those plants that reside within 100 miles of the major sorghum production areas in the U.S. It then sent surveys to each ethanol plant in the targeted areas. One hundred percent of the ethanol plants in the primary target area for grain sorghum use responded to the survey and to subsequent telephone interviews.
The United Sorghum Checkoff Program is a producer funded organization that is dedicated to improving the sorghum industry through research, promotion and education. For more information about the USCP and other research projects please visit www.sorghumcheckoff.com.