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Sorghum Trade Grinds to a Halt Following Chinese Tariffs on U.S. Commodities
Demand for sorghum in the Gulf of Mexico has almost disappeared following China's decision earlier this week to impose a 179 percent tariff on U.S. imports, according to the grain-handling company Scoular Co. The tariffs come as a direct result of the Trump administration imposing hefty tariffs on Chinese imports, sparking what many are calling a trade war.
Prior to announcing an investigation into American shipments in February, China has been the biggest importer of U.S. supplies. Sorghum prices immediately dropped following the announcement of the investigation and the possibility of imposed tariffs on U.S. goods and crops. Now that the tariffs have been imposed and enforced, sorghum prices relative to corn must drop in order to restore market demand.
Sorghum is used as feed for livestock and poultry and is also a component in the ethanol making process.
Due to recent high demand from China, sorghum has been priced out of the U.S. animal-feed market.
Whether or not U.S. sorghum will return to that market is unclear, as some commentators have speculated that Mexican demand will rise to meet the surplus.
For more information, please email Eric Heath, Senior Policy Analyst, Mississippi River Basin Program at the Northeast-Midwest Institute at eheath@nemw.org.
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THIS WEEK ON CAPITOL HILL
This week, the U.S. Senate will likely take up President Trump's pick to be the next Secretary of State, Mike Pompeo.
The House will focus on a bill to reauthorize the Federal Aviation Administration (FAA), whose authorization expires on Sept. 30. The bill authorizes the FAA through 2023 and does not include previous language that would privatize the nation's air traffic control network, a provision that would have likely stalled the bill in the Senate.
The following hearings impacting the region will take place this week:
Tuesday, April 24
- The Senate Agriculture, Nutrition, and Forestry Committee will convene a full committee hearing titled, "The State of Rural America," at 10:00 AM in the Russell Senate Office Building, Room 328A.
Thursday, April 26
- The House Appropriations Transportation, Housing and Urban Development Subcommittee will convene a hearing titled "FY 2019 Budget Hearing - FTA, FHWA and Marad," at 9:30 AM in the Rayburn House Office Building, Room 2358.
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For more information, contact
Matt McKenna,
Director of the Great Lakes Washington Program at the Northeast-Midwest Institute.
NEMWI: Strengthening the Region that Sustains the Nation
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