New Crop Cottonseed Market Rallies in Face of Tight Supplies

Reduced and delayed cotton planting, coupled with forage shortages, increase demand for the feedstuff

CARY, N.C. (May 20, 2013) – New crop cottonseed supplies available to dairies are expected to remain tight as U.S. farmers swap cotton acres for corn and soybeans across many parts of the Cotton Belt.

U.S. cotton production will likely drop 19 percent, from 2012 to 2013, according to the World Agricultural Supply and Demand Estimates Report released May 10, 2013. Total U.S. cottonseed production in 2013 is forecast to reach 4.58 million tons, compared to 5.76 million tons in 2012, resulting in about 2 million tons available for feeding.

Delayed planting, due to cool and wet weather, may further dampen supplies. While it’s been wet across much of the Cotton Belt, Texas remains dry.

Twenty-three percent of the 2013 U.S. cotton crop had been planted by May 13, as documented in the U.S. Department of Agriculture (USDA) National Agricultural Statistics Service Crop Progress Report. This compares with 38 percent, the five-year average. Additionally, USDA reported that the 2013 planting season is off to its slowest start since 1984.

“As cotton planting is delayed, farmers are less likely to plant cotton and more likely to plant soybeans,” says cottonseed merchant Larry Johnson of Cottonseed LLC, La Crosse, Wis.

“Furthermore, as planting is delayed, we’re more apt to see a smaller crop due to lower yields.”

For dairy producers, this means potentially tighter supplies and slightly higher prices for new crop cottonseed, he says. “The new crop cottonseed price has been rallying from increasing cottonseed demand coming out of Asia, and a shortage of forages.”

“We’re still feeling the impact of last year’s drought on forage supplies,” Johnson continues. “Additionally, we’re seeing a fair amount of alfalfa winterkill this spring.”

Despite tight supplies, Johnson still sees a strong fit for cottonseed in dairy cow rations. “Many dairy producers are currently buying new crop cotton,” says Johnson. “Whole cottonseed combines protein, fiber and energy, and works well with other ration ingredients to deliver a balanced and cost-effective ration.”

Cotton Incorporated suggests producers get in touch with their cottonseed merchant or feed dealer to check prices, or submit a request for cottonseed quotes through its Cottonseed Marketplace. Also, those interested in receiving periodic updates on the available cottonseed supply, along with feeding, storage and booking strategies, can sign up for the Whole Cottonseed E-newsletter.

Cottonseed is an excellent source of fiber, protein and energy. Typical rations can include up to 15 percent cottonseed on a dry matter basis. For more information, including reports on market conditions, feeding information and a list of suppliers, visit www.wholecottonseed.com.

Cotton Incorporated, funded by U.S. growers of upland cotton and importers of cotton and cotton textile products, is the research and marketing company representing upland cotton. The Program is designed and operated to improve the demand for and profitability of cotton.