SUMMARY OF CHANGES FOR THE GRAIN SORGHUM PRICING METHODOLOGY (23-CEPP-M0051)

(Released June 2022)

The following changes to the Grain Sorghum Pricing Methodology were made. Please refer to the Grain Sorghum Pricing 

Methodology document below for complete information.

• A statement is added in italics at the beginning of the Grain Sorghum Pricing Methodology document that states

the methodology is applicable for the 2019-2022 crop years. The pricing methodology is not applicable for the 2023 

and succeeding crop years. For the 2023 and succeeding crop years, RMA will release the sorghum factor in a 

bulletin prior to the contract change date.

• The document was reformatted to be more consistent with other policy documents.
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23-CEPP-M0051

(Released June 2022)

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Grain Sorghum Pricing Methodology

In accordance with the Common Crop Insurance Policy Basic Provisions and the Commodity Exchange Price Provisions: Section 

II – Grain Sorghum (CEPP), grain sorghum prices are derived using a factor “determined by RMA.” The method used to determine 

this factor is explained in this document. 

The pricing methodology described below is only applicable 

for the 2019-2022 crop years. 

The pricing methodology for grain sorghum uses a factor 

applied to corn prices. The factor is derived from historical 

regional-weighted grain sorghum prices and corn prices 

from the futures market. 

The methodology uses: 1) price series from six different 

major sorghum growing regions to produce a weighted 

average price series for grain sorghum, and 2) Chicago 

Board of Trade (CBOT) prices for corn. Price series for the 

sorghum growing regions are weighted based on the 

proportion of grain sorghum production in each region in 

each year. Four price series correspond to regions in New 

Mexico, Oklahoma, and Texas. These regions are defined 

as Houston/Galveston Port, North of the Canadian River, 

South of Line, and Triangle Area. The two other price series 

are for Kansas City and New Orleans. Kansas City prices 

correspond to all of Kansas and Nebraska. New Orleans 

prices correspond to all of Arkansas, Louisiana, and 

Mississippi. Annual grain sorghum production data for the 

states of Arkansas, Kansas, Louisiana, Mississippi, and 

Nebraska, and county-level production data for New 

Mexico, Oklahoma, and Texas are collected from the 

National Agricultural Statistics Service (NASS)/USDA.

For grain sorghum, weekly price data for locations in New 

Mexico, Oklahoma, and Texas are provided by Texas 

AgriLife Extension Service 

(agecoext.tamu.edu/resources/basis-project/basis-data). 

The simple average of all September observations 

(corresponding to typical harvest time) in each year is 

calculated for each location. Monthly Kansas City and New 

Orleans price series are from the Economic Research 

Service (ERS)/USDA, and the October and September 

observations, respectively, are used for each year.

The corn price for each year is the average settlement price 

of December CBOT corn futures during the month of 

October.

A ratio for each year is computed by dividing annual 

weighted average grain sorghum prices across all six 

regions by the corresponding price of corn for each year, 

noted as:

PGSt

W =

∑ (PGSt

Ri

∗ QGSt

Ri

)

6

i=1

PCt

CBOT

Where PGSt

W is the weighted price of grain sorghum in year t,

PGSt

Ri

is the price in region i in year t, QGSt

Ri

is the proportion of 

production in region i in year t, and PCt

CBOT is the price of corn 

as derived from futures markets in year t. The most recent 

10 year average of the ratios is then computed to produce 

the price factor as follows:

∑ (PGSt

W )

y

t=y−9

10

The year y is defined as the most recent year in the price 

data series. The factor will be applied to relevant futures 

prices with the price discovery periods using the current 

methodology. The discovery periods will be differentiated 

by a projected price discovery period and a harvest price 

discovery period, as well as sales closing date; however,

each combination will utilize the same price factor.

On occasion, certain values in the price series may not be 

reported. In the event that the data is incomplete in a given 

year, available information will be used to estimate missing 

values. If missing values are not able to be estimated, then 

both corresponding prices in that year would be removed 

from the series. The resulting price factor would then still 

encompass exactly 10 data points; however, the applicable 

time series would be longer than 10 years.

A list of counties in each region follows:

Houston/Galveston Port

Oklahoma

Adair, Atoka, Bryan, Carter, Cherokee, Cleveland, 

Choctaw, Coal, Craig, Creek, Delaware, Garvin, Haskell, 

Hughes, Johnston, Latimer, Le Flore, Lincoln, Love, Logan, 

Marshall, Mayes, McClain, McCurtain, McIntosh, Murray, 

Muskogee, Nowata, Okfuskee, Oklahoma, Okmulgee, 

Osage, Ottawa, Pawnee, Payne, Pittsburg, Pontotoc, 

Pottawatomie, Rogers, Seminole, Sequoyah, Tulsa, 

Wagoner, Washington

Texas

Anderson, Angelina, Aransas, Atascosa, Austin, Bandera, 

Bastrop, Bee, Bell, Bexar, Blanco, Bosque, Bowie, 

Brazoria, Brazos, Brooks, Brown, Burleson, Burnet, 

Caldwell, Calhoun, Callahan, Cameron, Camp, Cass, 

Chambers, Cherokee, Coleman, Collin, Colorado, Comal, 

Comanche, Concho, Cooke, Coryell, Dallas, Delta, Denton, 

DeWitt, Dimmit, Duval, Eastland, Edwards, Ellis, Erath, 

Falls, Fannin, Fayette, Fort Bend, Franklin, Freestone, Frio, 

Galveston, Gillespie, Goliad, Gonzales, Grayson, Gregg, 

Grimes, Guadalupe, Hamilton, Hardin, Harris, Harrison, 

Hays, Henderson, Hidalgo, Hill, Hood, Hopkins, Houston, 

Hunt, Jackson, Jasper, Jefferson, Jim Hogg, Jim Wells, 
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Johnson, Karnes, Kaufman, Kendall, Kenedy, Kerr, Kimble, 

Kinney, Kleberg, Lamar, Lampasas, La Salle, Lavaca, Lee, 

Leon, Liberty, Limestone, Live Oak, Llano, McCulloch, 

McLennan, McMullen, Madison, Marion, Mason, 

Matagorda, Maverick, Medina, Menard, Milam, Mills, 

Montgomery, Morris, Nacogdoches, Navarro, Newton, 

Nueces, Orange, Panola, Polk, Rains, Real, Red River, 

Refugio, Robertson, Rockwall, Rusk, Sabine, San 

Augustine, San Jacinto, San Patricio, San Saba, Shelby, 

Smith, Somervell, Starr, Tarrant, Titus, Travis, Trinity, Tyler, 

Upshur, Uvalde, Van Zandt, Victoria, Walker, Waller, 

Washington, Webb, Wharton, Willacy, Williamson, Wilson, 

Wood, Zapata, Zavala

Kansas City Terminal

All Kansas; All Nebraska

New Orleans Port

All Arkansas; All Louisiana; All Mississippi

North of the Canadian River

New Mexico

Colfax, Harding, Los Alamos, McKinley, Mora, Rio Arriba, 

San Juan, Sandoval, Santa Fe, Taos, Union

Oklahoma

Alfalfa, Beaver, Blaine, Canadian, Cimarron, Custer, 

Dewey, Ellis, Garfield, Grant, Harper, Kay, Kingfisher, 

Major, Noble, Roger Mills, Texas, Woods, Woodward

Texas

Carson, Dallam, Gray, Hansford, Hartley, Hemphill, 

Hutchinson, Lipscomb, Moore, Ochiltree, Potter, Roberts, 

Sherman

South of Line

New Mexico

Catron, Chaves, De Baca, Dona Ana, Eddy, Grant, Hidalgo, 

Lea, Lincoln, Luna, Otero, Roosevelt, Sierra, Socorro

Oklahoma

Comanche, Cotton, Jefferson, Stephens

Texas

Andrews, Archer, Bailey, Baylor, Borden, Brewster, Clay, 

Cochran, Coke, Cottle, Crane, Crockett, Crosby, 

Culberson, Dawson, Dickens, Ector, El Paso, Fisher, Floyd, 

Foard, Gaines, Garza, Glasscock, Hale, Haskell, Hockley, 

Howard, Hudspeth, Irion, Jack, Jeff Davis, Jones, Kent, 

King, Knox, Lamb, Loving, Lubbock, Lynn, Martin, Midland, 

Mitchell, Montague, Motley, Nolan, Palo Pinto, Parker,

Pecos, Presidio, Reagan, Reeves, Runnels, Schleicher, 

Scurry, Shackelford, Stephens, Sterling, Stonewall, Sutton, 

Taylor, Terrell, Terry, Throckmorton, Tom Green, Upton, 

Val Verde, Ward, Wichita, Winkler, Wise, Yoakum, Young

Triangle Area

New Mexico

Bernalillo, Cibola, Curry, Guadalupe, Quay, San Miguel, 

Torrance, Valencia

Oklahoma

Beckham, Caddo, Grady, Greer, Harmon, Jackson, Kiowa, 

Tillman, Washita

Texas

Armstrong, Briscoe, Castro, Childress, Collingsworth, Deaf 

Smith, Donley, Hall, Hardeman, Oldham, Parmer, Randall, 

Swisher, Wheeler, Wilbarger