RALEIGH, N.C. Over the
past few months, cottonseed prices
have been trending lower, and
according to Steve Owen, that
trend could continue well into
1996.
Owen, editor of Cottonseed
Digest, said the downward spiral
began in late November when the
U.S. Department of Agriculture
(USDA) announced a zero set
aside on cotton. Combine that with
the prediction of another possible
record-breaking cotton crop for
next year and carryover of 1.0 mil
lion short tons of cottonseed from
this year, and Owen indicates that
low prices are inevitable.
“For the balance of this year and
next year, it looks like cottonseed
will be priced at a level where
dairymen really can’t afford not to
be feeding it,” Owen said.
But according to Owen, old crop
prices haven’t reached the point
that will bring new consumers into
the market, which is what is
needed to bring old crop inventory
down. He said there has been some
increase in usage primarily from
dairymen already feeding cot
tonseed, but not enough to reduce
inventories and put a floor on
prices.
“There are a lot of things yet to
happen in the market,” Owen said.
“It looks like it (the cottonseed
market) wants to drift lower. It cer
tainly isn’t going any higher at this
point in time unless seed prices
come down to where they will
increase demand.”
Tom Wedegaertner, associate
director of cottonseed research and
marketing for Cotton Incorpor
ated, agrees. He said a lower than
expected cottonseed crash, com
bined with lower demand for cot
tonseed exports and high cot
tonseed inventories, have caused
seed prices to decline dramatically
over the past few months.
“The USDA released in its April
11 report that ending stocks are
estimated at 1.0 million short tons,
275,000 short tons more than the
Feb. 10 report,” he said. “This
large increase in ending stocks is a
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Low Cottonseed Prices Predicted
major reason we’re seeing these
low cottonseed prices now and into
the future.”
Although cottonseed prices
have declined dramatically, inven
tories have not decreased. Wede
gaertner said this is partially
because dairy producers are wait
ing for the price to drop even
further.
“Cotton farmers and farmers in
general had a good growing season
last year and prices for other feed
stuffs have remained relatively
low. Combine that with a mild
winter and we’re just not seeing
increased demand for cottonseed
right now,” he said. “But with
another large crop projected, it’s
going to be a good year for dairy
producers who are feeding
cottonseed.”
When it comes to buying cot
tonseed, Owen says producers
should be wary about purchasing
all their cpttonseed feeding needs
at once.
“Dairymen usually try to pick
the bottom of the market, drtd it
just is hard to do. I encourage them
to set a buying strategy and stick
with it They should plan on for
ward contracting for one-third to
one-half of their needs during
harvest, then buy another third or
half in the spot market after
harvest That will give them a good
average price,” he said.
Wedegaertner said there are a
variety of ways producers can
purchase cottonseed. New crop
contracts start with October,
November, December (OND), the
primary harvest period This is the
traditional pattern to establish
market carryover. These contracts
typically cover three-month per
iods and begin trading six months
to a year in advance.-The two lon
ger periods are January to Septem
ber and "clock” contracts which
run from October to September.
The “spot” market is the cot
tonseed market trading for a given
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day or week. According to Wede- region of west Texas is going
gaertner, this is the buying method through a drought. Of course
most producers use now because there’s always a chance a hurri
these prices sometimes become a cane could threaten cotton
bargain and the only reason to for- producing states on the Gulf of
ward contract is to “lock in” a low Mexico,” he said,
price. “At today’s levels it’s not good
Owen said dairy producers may business for dairymen not to be
want to consider keeping a closer buying seed. It’s too good of dairy
eye on the market and possibly feed not to use it,” he said. “This
purchasing new crop cottonseed year dairymen are going to be the
soon because there’s always a biggest benefactors of inexpensive
chance the weather could affect prices because their overall feed
prices during the growing season, costs 216 going to go down
especially during planting (April dramatically.”
and May). According to Wedegaertnercot
“We’re still dealing with a lot of tonseed has proven to be both cost
variables in the market, including efficient and nutritionally effective
the weather. The El Nino system for high-producing dairy herds. He
continues to affect the weather, says data shows that in most cases,
especially in the United States, and cottonseed should be fed at a rate
currently the major cotton growing of sto 8 pounds per cow per day.
Fayette County Holds Agronomy Day
displayed included seed suppliers, place) ribbon for a three-year
crop insurance providers, and a average yield of 145.0 bushels per
fresh water display. acre and a white (third place) rib-
Richard Burd, a crop producer, bon for a yield of 114.7 bushels
was awarded ribbons for his com per acre for a three-acre or larger
crop management in 1994. Enroll- plot,
ed in the Pennsylvania Five-Acre
Com contest, supported by the
Pennsylvania Master Com Grow
ers Association, Pennsylvania
Seedsmen Association, and the
Commercial Seed Industry, Rich
ard was awarded a red (second
UNIONTOWN (Fayette Co.)
The annual Fayette County
Agronomy Day was recently held
at Greenline Supply, Inc., a farm
machinery dealer located north of
Uniontown.
Speakers and the topics they
presented included: Anna Sarver,
USDA Consolidated Farm Ser
vice, “1995 Crop Insurance”;
Glenn Kerr, Brubaker Crop Con
sultants, “Legal Requirements of
Pesticide Management” and
“Comparing Pesticide Record
Keeping Systems"; William F.
Gallagher, extension agent.
“Pesticide Management Survey”;
and Donald C. Freets, agronomy
extension agent, “Management of
Field Crop Insects.”
Eight agribusiness representa
tives erected commercial displays
and spoke briefly to the more than
175 individuals gathered for the
meeting about the products they
manufacture or market. Exhibits
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Owen said that right now dairy
producers are faced with a golden
opportunity. “If dairymen would
look at cottonseed as the complete
feed, providing fiber, fat and pro
tein, it’s difficult to find a better
alternative. Producers should be
able to begin a cottonseed feeding
program and stick with it economi
cally for at least a year to 18
months. If this pricing trend con
tinues, they may even want to con
sider feeding it to dry cows and
heifers.”
For more information on the
cottonseed market, contact Steve
Owen at (713) 259-0156. Cot
tonseed Digest is a weekly news
letter providing market informa
tion to cottonseed buyers, traders,
and merchandisers.
The 175 crop producers who
were in attendance and purchase
or apply crop pesticides received
continuing education credits to
ward the maintenance of their
pesticide application license;
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