CARY, N.C. (May 20, 2013) – New crop cottonseed supplies available to dairies are expected to remain tight as U.S. farmers swap cotton acres for corn and soybeans across many parts of the Cotton Belt.

U.S. cotton production will likely drop 19 percent, from 2012 to 2013, according to the World Agricultural Supply and Demand Estimates Report released May 10, 2013. Total U.S. cottonseed production in 2013 is forecast to reach 4.58 million tons, compared to 5.76 million tons in 2012, resulting in about 2 million tons available for feeding.

Delayed planting, due to cool and wet weather, may further dampen supplies. While it’s been wet across much of the Cotton Belt, Texas remains dry.

Twenty-three percent of the 2013 U.S. cotton crop had been planted by May 13, as documented in the U.S. Department of Agriculture (USDA) National Agricultural Statistics Service Crop Progress Report. This compares with 38 percent, the five-year average. Additionally, USDA reported that the 2013 planting season is off to its slowest start since 1984.

“As cotton planting is delayed, farmers are less likely to plant cotton and more likely to plant soybeans,” says cottonseed merchant Larry Johnson of Cottonseed LLC, La Crosse, Wis.

“Furthermore, as planting is delayed, we’re more apt to see a smaller crop due to lower yields.”

For dairy producers, this means potentially tighter supplies and slightly higher prices for new crop cottonseed, he says. “The new crop cottonseed price has been rallying from increasing cottonseed demand coming out of Asia, and a shortage of forages.”

“We’re still feeling the impact of last year’s drought on forage supplies,” Johnson continues. “Additionally, we’re seeing a fair amount of alfalfa winterkill this spring.”

Despite tight supplies, Johnson still sees a strong fit for cottonseed in dairy cow rations. “Many dairy producers are currently buying new crop cotton,” says Johnson. “Whole cottonseed combines protein, fiber and energy, and works well with other ration ingredients to deliver a balanced and cost-effective ration.”

Cotton Incorporated suggests 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.

For dairy producers, this means potentially tighter supplies of new crop cottonseed. Total U.S. cottonseed production in 2013 is forecast to reach 4.38 million tons, compared to 5.27 million tons in 2012.

Cottonseed merchant Larry Johnson of Cottonseed LLC, La Crosse, Wis., says that even with the shorter supplies, he expects that dairies will continue to have ready access to cottonseed, and that cottonseed prices will adjust with other commodities.

“Cottonseed is not a collectible,” he says. “Just because there is less of it does not necessarily mean it’s worth more. It still needs to sit in the ration alongside other ingredients. We routinely run the nutritive values, and cottonseed remains a strong fit.”

Tom Smith, a cottonseed merchant with Cape & Sons, Abilene, Texas, anticipates slightly higher prices for cottonseed, relative to other feed ingredients. “The numbers may come down in the fall, but cottonseed may not come off nearly as much as other feed ingredients.”

Currently, new crop is trading at a discount to old crop, Johnson notes.

Experts agree that cottonseed production will vary greatly from region to region, and that both dairies and crushers will be looking to access available supplies.

“Some crushers are located in areas anticipating the biggest losses, such as the Mid-South, which is losing more than 50 percent of its cotton acres,” Smith says. “Despite this, I expect the crush to remain fairly constant. Crushers will figure out a way to get seed to the mill. They will have to originate from nontraditional sources.”

Other factors potentially offsetting the anticipated shortfall are imports and exports, Johnson says. “We may see more seed from Australia going into California, and less being exported.”

Total U.S. cottonseed production in 2012 is forecast to reach 5.913 million tons, up from 5.37 million tons in 2011, a 10.1 percent increase, according to the November Crop Production Report from the U.S. Department of Agriculture’s National Agricultural Statistics Service.

In Texas, home to half the nation’s cotton acres, growers harvested 67 percent more cotton in 2012 compared with 2011. Last year’s Texas crop was decimated by drought.

“Across the Cotton Belt, the 2012 cotton crop enjoyed good growing conditions and escaped the wrath of late-season hurricanes, including Hurricane Sandy,” says Tom Smith, a cottonseed merchandiser at Cape & Son, Abilene, Texas. “Cotton quality is very good and ginning has gone extremely fast this season. Thus, prime feed grade cottonseed is readily available.”

Overall, 43 percent of the cotton crop was reported in good to excellent condition, according to the USDA report, a rating that Smith describes as “outstanding.”

According to Tom Wedegaertner, director of agricultural research at Cotton Incorporated, demand for whole cottonseed remains strong as the overall need for feed, fiber and forage materials drives the market price.

“Cottonseed has been a relatively good value this fall, so we are encouraging dairy producers to check prices and consider booking a portion of their needs to keep this feedstuff in the rations of their high-producing dairy cows.”

The Cottonseed Marketplace at WholeCottonseed.com allows producers to request cottonseed quotes from multiple merchants using one simple form. Dairy producers also can visit the website for industry news, and follow @CottonTom on Twitter for updates on cottonseed availability throughout the year.

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.”

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.”

Cottonseed’s competitive value this fall is illustrated when comparing the prices of other common feed commodities. Source: Cotton Incorporated. (10/1/12)

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.

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With the whole cottonseed dry spell expected to intensify in 2013, experts are urging dairy producers to consider locking in up to a year’s worth of the feedstuff.

Cotton farmers planted 14 percent fewer cotton acres in 2012, explains Tom Wedegaertner, director of agricultural research, Cotton Incorporated. “While a more ‘normal’ summer could produce more harvestable acres of cotton, and more cottonseed, we anticipate the amount of whole cottonseed available for dairies will remain flat compared to 2011.” If USDA’s June 29 forecast of 17 million bales holds true, the crop could produce 5.7 million tons of cottonseed, of which 3 million tons would be available for feeding.

A “fair amount of variability exists around the USDA forecast,” cautions Dr. John Robinson, a professor and Extension cotton marketing economist at Texas A&M University.

“The weather is definitely looking better than last year, but 2011 was historically dry and absolutely terrible,” he says. “‘Hot and dry’ would describe a neutral condition in Texas, but portions of the state remain in severe or extreme drought. We need to be ready for a slightly smaller crop than what USDA has predicted.”

His advice to dairy producers: keep an eye on the crop – especially data from the August and September USDA reports; and, consider that 2013 is poised to offer little reprieve.

“I’m fully anticipating a decline in cotton acres next year given the futures market prices for wheat, soybeans, and corn. Land is being booked up right now to go to those competing crops. They just pencil out better in many areas of the Cotton Belt.

“In Texas, however, we don’t have good alternatives,” he notes. “Even with low cotton lint prices, cotton wins out over sorghum and possibly even dryland wheat. Corn is a risky proposition.”

Wedegaertner echoes Robinson’s advice to keep a watchful eye on the markets and consider that prices of the 2012 cottonseed crop most likely will be at their “lowest levels in recent memory,” especially when compared to other commodities.

“There is no other single ingredient that can mimic cottonseed’s ‘triple-nutrient’ combination of high protein, energy and fiber, so it’s worth taking a look at price if you haven’t in a while,” Wedegaertner says.

Cotton Incorporated has made shopping for cottonseed easy with its Cottonseed Marketplace. Plus, 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.

Many producers who’ve taken cottonseed out of the ration in recent years may not even realize cottonseed prices have come down, he explains. “It’s always a good idea to spot check and consider booking at least a portion of your needs.”

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.

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Lower cotton acreages, a persistent Texas drought and a recent dip in cottonseed prices add up to the following advice for dairy producers: check prices now and consider locking in at reasonable prices for the balance of 2012.

According to Larry Johnson of Cottonseed, LLC, La Crosse, Wis., dairy producers may be able to purchase whole cottonseed from March through December at considerably lower pricing than 90 days ago. “For example, in the Memphis North market, we recently traded cottonseed in the $225-240 range, about $65-85 per ton lower than in December.”

Tom Wedegaertner, director of agricultural research at Cotton Incorporated, says producers need to weigh the market factors: “It’s possible that we could actually have a larger supply of cottonseed in 2012 compared to 2011, despite an anticipated 7.5 percent reduction in acres, but the fate of that supply hinges largely on the weather in Texas.”

The U.S. Department of Agriculture’s March 6 Drought Monitor reported “mounting lack of precipitation” in western Texas and the Texas Panhandle – a stark reminder of 2011, which saw the cotton crop – and its prized seed – shrivel under extreme drought.

“It’s no surprise many producers aren’t aware that cottonseed prices have come down,” Johnson says. “We saw a lot of dairies scaling back on cottonseed three years ago when prices got extremely high, and many haven’t looked into prices since. With milk prices falling, dairy producers are looking to reduce feed costs.”

He suggests contacting their nutritionist to evaluate cottonseed in a least-cost formula ration. “If you fed cottonseed before when it was a value, why wouldn’t you feed it now?”

Regularly checking cottonseed prices is “just good practice,” Wedegaertner adds. Cotton Incorporated launched the Cottonseed Marketplace last year to aid the process. Using one simple form at WholeCottonseed.com, producers can request quotes from multiple merchants.

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.

Total U.S. cottonseed production in 2011 yielded 5.312 million tons, down from 6 million tons in 2010. Though production decreased, total cottonseed available for feed mirrors 2010’s figures at 2.975 million tons.  Cottonseed demand remains strong as the overall need for feed, fiber and forage materials drives the market price.

“The drought in Texas significantly impacted production in 2011, but we hope to see the cycle break and cottonseed prices retreat in 2012,” says Tom Wedegaertner, director of agricultural research at Cotton Incorporated. “As a triple nutrient supplier, whole cottonseed remains a valuable feed component, delivering energy, protein and fiber to high-producing dairy cows. It’s important to consider these benefits when examining your ration.”

The Cottonseed Marketplace at WholeCottonseed.com allows producers to request cottonseed quotes from multiple merchants using one simple form. Dairy producers are encouraged to visit the website frequently for industry news, and follow @CottonTom on Twitter for updates on cottonseed availability throughout the year.

Tom Wedegaertner talks about the new method for ordering cottonseed through the Cottonseed Marketplace. Dairy producers can click on the “I am a Buyer” button on the homepage to instantly connect with sellers of whole cottonseed and request a quote. Participating merchants receive the inquiry and can reply directly and confidentially with a quote!