U.S. sorghum producers have long complained of playing second fiddle to corn. Although sorghum has lower production costs, only about 2.5 percent as much of it is produced as that of corn. In terms of value per acre, it grosses 30 percent as much per acre as corn. Once sorghum became eligible for conversion into ethanol, it was thought that the crop had found its niche in terms of production area (southern Plains) as well as markets. Primary sales would go to select overseas customers with over-production going into ethanol. However, sorghum remains largely tied to the value of corn. The correlation of the value of corn to sorghum production is near perfect, whereas the R2 value of sorghum to sorghum production is slightly lower. The stock...
From WPI Consulting
Weighing in on strategic realignment
WPI’s team was retained by the governing board of a U.S. industry organization to review a decision, reached by vote, to invest significant assets into the development and management of an export trading company. WPI’s team conducted a formal review of this decision and concluded that the current level of market saturation would limit the benefits of the investment. Based on WPI’s analysis and recommended actions, the board subsequently reversed its decision and undertook a strategic planning effort to identify more impactful investments. On behalf of numerous clients, WPI has not only assisted in identifying strategic paths but also advised their implementation.