Cotton gins are storing cottonseed in anticipation of increased prices in the forward months.
Due to tight supplies and a late crop, the early demand for cottonseed has remained strong.
Source: Cotton Incorporated
As expected, the 2013 cottonseed crop is one of the smallest in years, according to Larry Johnson of Cottonseed LLC in La Crosse, Wis.
Growers harvested 7.78 million acres of cotton in 2013 -– the lowest total since 2009. Last year’s crop yielded 5.67 million tons of cottonseed, while the 2013 crop is projected to yield 4.357 million tons – a 25% decline.
For dairy producers, this means potentially tighter supplies and slightly higher prices for cottonseed, says Texas A&M University Professor and Extension Specialist Economist of Cotton Marketing John R.C. Robinson.
If animal consumption of cottonseed doesn’t make a big change -- which I don’t anticipate -- it stands to reason that prices will go higher," says Robinson.
"Due to tight supplies and a late crop, the early demand for cottonseed remains strong, which has reduced the price dip that typically occurs during harvest," says Johnson. "Cotton gins are storing cottonseed in anticipation of increased prices in the forward months."
Additionally, South America is on target to harvest an outstanding soybean crop, which could negatively impact the price of feed ingredients, including cottonseed. "With cottonseed prices holding steady, this may offer an opportunity for dairy producers to secure their cottonseed needs," says Johnson.
According to Tom Wedegaertner, Cotton Incorporated’s director of cottonseed research and marketing, while dairy producers can expect to see less cottonseed this year, the quality will be good. "Across the Cotton Belt, the 2013 cotton crop grew largely under favorable conditions and ‘dodged the hurricane bullet,’" he says.
Robinson adds that despite heavy rains in some areas of Texas, the cottonseed crop didn’t suffer. "I’m not aware of any cottonseed quality issues," Robinson says. "Cottonseed in Southern Texas was harvested before the rains hit and the other key Texas cottonseed growing area, from Abilene to Lubbock, only received some rain."
On the other hand, a variety of unfavorable weather conditions challenged this year’s forage crops. Thus, forage availability may be limited in some areas.
Maurice Eastridge, a professor and extension dairy specialist at The Ohio State University, adds that forage quality continues to be an issue. "Whole linted cottonseed is the best concentrate source to use as a forage extender," says Eastridge.