Increasing Feed Grains in North Carolina: An Integrated Approach.

The North Carolina livestock industry is not only important to our state but also to the nation.  We are second among states in cash receipts from all poultry and eggs, second among states in pig inventory and pig crop, and sixth among states in cash receipts from livestock, dairy and poultry.  The problem is that North Carolina was eighteenth among states in wheat and soybean production, and nineteenth among states in corn production in 2010.  Sorghum production was negligible.  In other words, we are a grain-deficit state and the deficit is about 2/3 of the required feed supply.  The deficit varies year to year but is usually at least 200 million bushels depending on NC production, exports, and other local uses.  We have been importing feed grain by rail from the Midwest for many years.  The current crisis has come about because the rates charged by the railroads to bring the feed supply to the North Carolina livestock producers has been rising 7-8% per year and is now around 20% of the July corn futures price.  The railroads are also requiring large orders to earn their business as other industries such as the military are in competition for their services and there is a limited supply of rail services. The livestock producers are on the verge of not being able to do business profitably in North Carolina.  

The meat and poultry production and processing industries are major employers, sources of income, and tax base in rural North Carolina.  Loss of livestock and poultry production reduces processing requirements so the combined economic impacts are large. Large negative economic impacts have been felt in communities where processing plants closed after poultry production was reduced. If this continues, rural North Carolina is in for seriously troubled times.

North Carolina’s livestock producers, government, university personnel, and others have seen an opportunity that would be a win-win situation for feed grain and livestock producers.  If North Carolina can expand its grain production and profitably sell it to the livestock producers at a price that is less than the total cost of purchasing and transporting the grain from the Midwest, then both industries will benefit, as well as the citizens of rural North Carolina. 

Grain sorghum has been grown off and on in North Carolina.  But, until now, there has not been much of a market.  Grain sorghum has the advantage of being able to tolerate drought, so it is a more consistent crop with potentially lower production costs than corn. Murphy Brown is now willing to make a market for grain sorghum produced in North Carolina.  They are willing to offer a production contract for grain sorghum at 95% of the corn price.  This is an opportunity for feed grain growers to potentially expand their grain production, increase their profit, and to grow a crop that produces well on marginal corn land.  Grain sorghum also is a potential rotation crop that could help control resistant Palmer amaranth on Roundup Ready corn, soybean, and cotton acres.