Cottonseed production projected down, with anticipated strong prices in fall

Current prices offer favorable buy for those seeking cottonseed’s triple punch of fiber, protein and energy

CARY, N.C. (June 22, 2015) – With reduced cotton acreage and a challenging 2015 planting season, attractive cottonseed prices may not hold through the fall.

“Due to the smaller crop, prices are definitely going up and will be relatively strong this fall,” predicts cottonseed merchandiser Larry Johnson of Cottonseed LLC, La Crosse, Wis.

Plentiful global cotton supplies have put market prices below the cost of cotton production, explains Tom Wedegaertner, director of cottonseed research and marketing, Cotton Incorporated. “In addition to growers committing to fewer acres, untimely rains have put a damper on planting and could increase abandonment rates, further reducing the cottonseed supply available to dairies.”

The U.S. Department of Agriculture World Agricultural Supply and Demand Estimates report, released June 10, shows the 2015 anticipated harvested crop at 8.6 million acres, a decrease of 0.75 million acres, compared to last year. The 2015 crop is forecast to produce 14.5 million bales (compared to an estimated 16.32 million bales in 2014), netting about 5.1 million tons of cottonseed, compared to 5.7 million tons in 2014 – an 11 percent decrease.

With softer milk prices, some dairy producers may be weighing their feed options while others will feed cottonseed “no matter the price,” Johnson says. “Its combination of protein, fiber and energy works well with other ingredients to deliver a balanced ration.”

With cotton production, Texas is king
Experts advise dairy producers who are assessing their cottonseed buying strategies to keep an eye on growing conditions in the Lone Star State. Texas grows about half of the U.S. cotton crop.

“The active El Niño weather pattern has made its presence known in Texas,” says John R.C. Robinson, Texas A&M University professor and extension specialist economist of cotton marketing. He says record rainfalls throughout the state prevented planting in many areas.

Both yield and quality could be in jeopardy, he adds. “South of Corpus Christi, some growers cut their losses by taking preventive planting.”

In the Lubbock area – the densest cotton-growing area of Texas – moisture conditions have not been so extreme.

“Barring no major challenges, this area may achieve high cotton yields on dryland acres due to El Niño’s plentiful moisture,” Robinson says. “This boost could compensate for the losses near the Gulf Coast and potentially support more cotton production.”

In the Mid-South, March through May rainfall was 150 percent of average, reports H. Scott Stiles, University of Arkansas extension economist, who expects a 31 percent drop in cotton acres in the five-state area compared to last year.

“Most of the decline is market related and about 10 percent is weather related,” he says. “Given the late start, growers will need near-perfect growing conditions from here forward to be profitable.”

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.

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.