Potentially lower U.S. cotton acreage, a persistent Texas drought and a recent dip in cottonseed prices add up to sage 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 dairy 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.” (http://www.cotton.org/news/meetings/2012annual/plantintent.cfm)
USDA’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. (http://droughtmonitor.unl.edu/monitor.html)
“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.”
Johnson suggests that producers 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 form at www.WholeCottonseed.com, producers can request quotes from multiple merchants.
Producers can also check monthly cottonseed prices at Cotton Incorporated’s website.
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.