Nothing soft and fluffy about cottonseed prices

Hoard's Dairyman: 

Nothing soft and fluffy about cottonseed prices

Date: 
Fri, 07/29/2011

We visited several dairy producers in the last few days and, of course, feed prices didn’t take long to come up. That’s entirely fitting, since all that feed prices seem to do lately is go up. What was different, though, is this time instead of corn or hay being the main topic of discussion, it was cottonseed.

It’s already clear that the brutal drought in Texas is having an equally brutal impact on cottonseed prices. If you’ve already booked supplies or have plenty on hand, then bravo for you. But, if you have to reload anytime soon, then brace yourself for something very ugly.

USDA’s latest forecast of the national cotton crop was a reduction of one million bales, mostly because of the carnage that heat and drought are having in Texas, the nation’s largest cotton-growing state. Planted acreage is 25 percent higher than last year, but total output is predicted to be 10 percent less or more. A significant amount of that is expected to be fields that will simply be abandoned. According to the Texas AgriLife Extension Service, total ag losses in the state in 2012 due to the drought could be $8 billion, nearly double the all-time record set in 2006.

Two Idaho producers told us they just booked cottonseed at $425 and $450 per ton which sounded awful until a California producer said that, after running out of his $277-per-ton contract, the best he could find to rebook was $459. Ouch! Then again, one of those Idaho producers mentioned that a nutrition consultant told him he expects $600 cottonseed by September.