Economics of Sorghum

(Jamie) Welcome to Farm Factor! Let’s join Kyle as he visits with Dr. Bill Golden about the economics of sorghum as it relates to water usage.
(Kyle) I have the opportunity to visit with Dr. Bill Golden today, with Kansas State University. We’re going to be talking about sorghum and the economics of sorghum. But especially when it comes to water use. Tell me about your work Dr. Golden. (Bill) At the present time we’re doing a quite intensive study up in northwest Kansas. A group of producers have established a Local Enhanced Management Area in that area. And they have reduced their water use by about 20 percent. They’re working on an allotment of 55 inches over 10 years and we have been involved in this program for the last two years.This is a five year program. And my main focus is studying the reactions of producers to reduce water use. (Kyle) Is there a perceived outcome before you started this? What you thought you would see? Are you seeing what you’d thought you’d see? Or is there no perception? (Bill) Well, actually we’re not seeing what the majority of economists would think we would see. It’s a perception that if you use less water, then you have to lose yield and that will result in reduced cash flows and incomes. What we’re actually seeing in the area is that producers are shifting their crops, they have reduced their planted acres of corn, they have increased their planted acres of grain sorghum. Their soybean acres have stayed about constant. When we reviewed the financial information we’re actually seeing that we’re not losing revenue. We’re comparing producers both inside the LEMA area and outside the LEMA area. Obviously, the producers outside the LEMA area are using less water. But what we’re finding is that does not equate to less income. So, after two years of the study, we’re questioning, does reduced water use actually reduce farm profits? (Kyle) With the high variability of rainfall throughout the western portion of Kansas or in farming in general, is five years long enough to get a good data base? (Bill) It probably isn’t, but at the same time, that’s all we have. The producers into the LEMA wanted to try it for five years, and then make the decision whether to continue on with this program. The implication that I am getting from the producers involved with the LEMA is they’re going to do this. And if they continue it then we will continue monitoring that area because there’s a lot of interest in other areas on how we reduce water use and at the same time maintain profitability. (Kyle) That’s Dr. Bill Golden. He’s with Kansas State University. This is Kyle Bauer reporting from Sorghum U.
(Jamie) Folks, stay with us – Kyle will be back with Lucas Haag from Kansas State University.

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