EU Using Incorrect Sorghum Information
Levy Board is using loan rate data that are set below market values.
Compiled by staff
Published: Sep 24, 2010
The Sorghum Checkoff has sponsored a study with the U.S. Grains Council to determine how the European Union Levy Board calculates their import levy on sorghum and whether it reflects actual U.S. sorghum export values. The report found that the levy rate was based on pricing data for U.S. barley shipped out of Duluth, Minn. However, barley and sorghum prices are generally not related.
Cary Sifferath, USGC senior director in the Mediterranean and Africa, says barley is not generally sold through Duluth, which makes it difficult for the Levy Board to obtain solid numbers there. That being the case, the values are likely posted county prices used to determine U.S. commodity loan rates, but those prices are generally set below market values. Sorghum Checkoff Board director Bill Kubecka, a sorghum producer from Palacios, Texas, says since corn and sorghum markets are tied closely together, it may make the levy more reliable if it were based on a U.S. Gulf corn benchmark.
Meanwhile, Spain has purchased 44,000 metric tons of U.S. sorghum. The Sorghum Checkoff is excited about this latest purchase. Kubecka says they are certain there are opportunities in Europe for additional sales considering the high prices of feed wheat and other feed grains within the trading block. European feed and grain organizations have asked for a sorghum levy reduction to help provide relief.
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Tagged: sorghum, checkoff, barley, wheat
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