Buy ahead to capitalize on the triple-nutrient supplier's competitive value


The Corn Belt's widespread and severe drought sent corn and soybean prices soaring this growing season. With grain and oilseed prices rising disproportionately to milk and whole cottonseed prices, experts recommend dairy producers capitalize on the current competitive value of cottonseed to boost milk and butterfat production.

"When it comes to cottonseed, the price is right, says Tom Wedegaertner, Cotton Incorporated director of agricultural research. "While feed commodities have increased dramatically in price, the price of cottonseed has remained steady." Average cottonseed spot prices have been hovering around $350 per ton. "When compared to $7 corn and $16 soybeans, today's cottonseed is a tremendous value."

Cottonseed's competitive value this fall is illustrated when comparing the prices of other common feed commodities. Source: Cotton Incorporated. Dr. Carl Old, an independent dairy nutritionist based in Le Grand, Calif., concurs. "When cottonseed is in the $300 per ton price range, it's a good buy. Right now, relative to corn, cottonseed is an excellent buy." While cotton acres were down 14 percent in 2012, cotton yields are outstanding, says cottonseed merchant Larry Johnson of Cottonseed, LLC, La Crosse, Wis. "In some areas, growers expect to harvest a record yield." Old says there's always a place for cottonseed in high-producing cows' rations.

"The energy density in cottonseed is really important for top production cows. Generally, cows producing one third or more than herd average should be fed whole cottonseed." Periodically, dairy producers ask Old what they can feed to replace whole cottonseed. "My response is always ‘whole cottonseed.' You can meet cottonseed's nutritional specifications on paper, but cows will not produce as much milk or butterfat when fed alternative feeds.

There is no replacement for cottonseed." With crop forecasters predicting increased corn and soybean acreage for 2013, cotton acreage is expected to shrink by as much as 2 million acres in 2013, Wedegaertner says. "Cottonseed will get real scarce and thus more costly to purchase over the next couple years." Dairy producers who want to lock in cottonseed should not delay, advises Nigel Adcock of Cottonseed, LLC. "There's a short-term buying opportunity this fall, and producers may want to strongly consider locking in up to a year's worth of their cottonseed needs."

Forward contracts are available all the way through 2013 for cottonseed, he adds. Cotton Incorporated suggest 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.

10.01.2012