After months of scrutiny and roadblocks, China announced it is dropping its probe into U.S. sorghum, as well as the hefty 178 percent tariff. As trade talks played out in Washington, China’s Commerce Ministry determined the battle would ultimately affect the cost of living for consumers. It’s that news that lifted a weight off the sorghum industry; a weight that had carried a heavy burden since February.
“It's big, it's really huge in terms of what it means,” National Sorghum Producers (NSP) CEO Tim Lust told U.S. Farm Report. “Very positive for our growers, very positive for our industry, very positive for our consumers and our customers in China.”
As the excitement ripples through the sorghum industry of regaining what had become U.S. sorghum’s top customer, the reality is in the last five years, China became the industry’s top buyer of U.S. sorghum. Prior to February, China consumed about 60 percent of U.S. sorghum exports. NSP is taking a realistic approach to exports, knowing shipments won’t resume overnight.
“We clearly know and understand that this is the first step, and there's been a lot of drama that has happened the last few months,” said Lust. “Trade won't immediately start back tomorrow, but this is huge in terms of the tariffs going away.”
Lust says the news came at a time when South Texas sorghum producers are only 30 days away from harvesting the 2018 crop.
“In the sorghum industry we have two parts : those who are about start harvesting and excited to be able to talk to them about some opportunities there for markets,” said Lust. “For the rest of our industry, those who are about to plant, certainly looking forward to putting more spring in the ground over the next few days as we know planters are running across much of the United States.”
China’s investigation into U.S. sorghum escalated quickly this spring, as China’s 178 percent tariff came into play. The news stopped shipments in their tracks, diverting those boats to other countries.
“We had over 20 boats on the water that have been diverted to other countries and so from that standpoint, it's a matter of getting the pipeline back up and going,” said Lust.
While NSP is relieved to have China back open for U.S. sorghum business, the silver lining in the chaos may be the markets gained. Lust says Spain consumed some of the diverted shipments, and the industry started selling to Saudi Arabia for the first time.
“We never sold service to them [Saudi Arabia] before, they bought a number of boats,” said Lust. “So working very hard on that side also to make sure that we have the technical people on the ground there to make sure that is a positive experience.”
As U.S. sorghum suppliers work to get ships back on the water to China, Lust is excited about the possibility of the market and relationships ahead.
“Today we're going to celebrate the fact that we have an opportunity to go back forward and rebuild the market that has been very good to us,” said Lust.
Another piece of the ongoing investigation is the legal battle and fees the industry incurred. However, Lust says late last night he received a note from the legal firm representing the industry, saying the fees will come in “under budget.” That’s another feather in the industry’s cap, after a drawn-out saga and trade dispute.