Challenges Amidst Acreage Slump

 
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There’s less fiber and post-gin cottonseed to supply byproduct markets

Less cotton seed being planted in the spring has a ripple effect into the fall when less cotton is picked from fields and packed in modules. In addition to less fiber, there’s less post-gin cottonseed—hulls, linters, meal and oil—to go around. 

After being separated during the ginning process, mounds of cottonseed are transported to mills for commercial crushing. From there, cottonseed derivatives find their way into an array of products—cooking oil, cattle feed, electronics, food ingredients and more. 

“Up to 15% of meal and seed is exported, but the rest is used domestically,” explains Ben Morgan, executive vice president, National Cottonseed Products Association, Cordova, Tenn.

On average, one cotton acre typically produces 1,100 lb. of cottonseed. Hulls are primarily sold as a roughage feed source for cattle, but they are also used in oil drilling. Linters are composed of the fuzzy fiber left on seed after ginning and used in cotton swabs, paper currency, makeup, ice cream, toothpaste and LED televisions. Meal is used in cattle feed and organic fertilizer. Cottonseed oil has strong stability at high temperature and is used primarily as a cooking or salad oil. Until the 1940s, cottonseed oil was the top vegetable oil produced in the U.S. 

“On a ton of cottonseed, 25% to 27% goes to hulls; about 47% is used for meal; 15% is cottonseed oil; and the balance is linters,” says John Fricke, president, Planters Cotton Oil Mill, Pine Bluff, Ark.

This year, U.S. cotton acreage is predicted at 9.5 million acres, a 13.5% decline from 2014. 

“It’s hard to believe, but Georgia has more cotton acres than Arkansas, Mississippi and Tennessee combined,” Morgan says. “Trying to obtain cottonseed for crushing or feeding to the whole seed industry is very tough.”

Just four years ago, 2.5 million tons of cottonseed was crushed, Fricke says. This year, it might not reach 
2 million tons.

Against economic thinking, the drop in cotton acreage hasn’t produced a boost in value for cottonseed because cottonseed has to compete with other feed ingredients. Big feed grain crops stifle whole cottonseed prices. With abundant competition, the cattle industry can substitute ingredients for cottonseed and buy time. Hulls and cottonseed meal have to push for market space with other proteins, such as soybean meal, canola meal and DDGS. 

In light of the acreage slump, Morgan believes the cottonseed industry needs to expand its product lineup. “We need to improve the fiber side so growers plant more acreage,” he says.

Will the availability of cottonseed products further tighten or rebound in the future? “I think we’re possibly at the bottom end of cotton acreage drops,” Fricke says. “After all, cotton is a commodity like the others, and the demand structure dictates price, and price dictates acreage.” 

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