Sorghum use falls sharply
February 23, 2015
Feb. 23, 2015 - Use of US corn in ethanol production increased 5 percent in December while sorghum use for biofuel tumbled 57 percent from the previous month, the US Department of Agriculture said in a new monthly report on Thursday. The so-called Grain Crushings and Co-Products Production report was the first in a suite of monthly reports that will be launched this year.
Some of the reports were discontinued in 2011 due to budget cuts. The grain report details use of corn in biofuel and beverage alcohol as well as production of “co-products” such as distillers dried grains (DDGs), corn gluten feed and corn oil. The dataset is valued by analysts, who can use it to predict how the government will forecast supply and demand in separate monthly reports issued by the World Agriculture Outlook Board that typically move grains futures markets.
“It gives us a little more transparency for what’s becoming the largest demand category (for corn),” said Jefferies Bache analyst Shawn McCambridge. Ethanol accounts for more than a third of US corn use, with feed, export and food accounting for the remainder. In December, the new report showed 510.1 million bushels of corn were used in dry and wet corn milling for fuel and beverage alcohol. That is up from 485.1 million bushels in November and 476.5 million bushels in October.
Production of DDGs (including solubles) jumped 8 percent in December to 1.92 million tonnes. Sorghum use for ethanol fell sharply as record exports of the feed grain to China resulted in a price spike that made it uneconomical for use in biofuel production. In December, 889,000 cwt of sorghum (about 1.59 million bushels) was used in ethanol production, down from 2.07 million cwt in November, USDA said. The next report, including data for January, will be released on March 2.
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