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1008 PD: Cottonseed scarcity may cause concerns this fall

Published on 30 June 2008

With all of the talk about biofuels, and with oil prices reaching an all-time high, crops such as corn, soybeans and wheat have skyrocketed – in demand, production and price.

Not surprisingly, farmers in the Southeast are taking advantage of their acres and planting crops such as corn, soybeans and wheat, leaving cotton in the dust.

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“We lost more than 1.4 million acres [of cotton] in 2008, and the acres we lost were primarily the high-producing acres,” says Tom Wedegaertner, director of cottonseed research and development for Cotton Incorporated of Cary, North Carolina.

The decrease in cotton acres means a 60 percent drop in tons of cottonseed available. The limited supply is pinching the valuable ingredient out of some dairy producers’ rations.

Although U.S. cotton production and supply may be down, there is actually a “glut,” or an oversupply of cotton worldwide, Wedegaertner says.

“India has dramatically increased its cotton production in a very short amount of time,” he says. “This country doubled its yield, from 200 pounds per acre to 400 pounds per acre, in less than two years.”

India is currently second in worldwide cotton production, with China being the first. The glut is another reason why Southeastern U.S. cotton producers began trading in their cotton fields for slightly “greener” opportunities.

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From Cotton Belt to Sun Belt
Wedegaertner says more than five million tons of cottonseed were available for feeding purposes three years ago, but this year, only about two million tons will be obtainable. Most of this supply – as much as half of the total crop – will be produced in Texas, an area relatively unable to grow most of today’s more profitable crops. However, production in the Lone Star state comes with some risks.

“For farmers who want to know what the price of cotton is going to be, I’d recommend that they keep an eye on growing conditions in Texas,” Wedegaertner says.

Although the weather has been beneficial for the past couple of years, Wedegaertner says Texas is “fickle” and may face ultra-dry conditions.

He also advises producers to be prepared to purchase their cottonseed in the fall for the winter months and into the spring and summer seasons.

“Historically, cotton, just like most other crops, is less expensive at harvest time,” he says.

However, desperate grabs for cotton will be virtually inevitable come this fall.

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“We’re down a couple million tons,” Wedegaertner says. “It’s not going to appear out of thin air.”

Cutting back
Cottonseed has three basic component advantages: fat, protein and fiber, says Jess Argyle, nutritionist for Standard Nutrition Company, a nutrition consulting firm in the Northwest.

“The fat increases the energy density of the ration,” Argyle says. “The digestible fiber helps to maintain butter fat, especially during the summer when intakes drop due to the heat.”

Although Argyle has started to cut back cottonseed, he is not telling dairymen to take it out completely. James Barmore, an independent nutritionist for Five Star Dairy Consulting in the Midwest, agrees. Lately, Barmore has been backing off the cottonseed, but he pulled it out completely only in limited situations. He says the problem with removing cottonseed entirely is that it is a difficult element of the ration to replace, but with recent price increases and contracts running out, he will have to look at complete removal.

“In order to get the protein, fat and digestible fiber, it takes several different ingredients, which are difficult to fit into the same space in the ration,” Barmore says. Argyle and Barmore advise using distillers grains, corn silage and forage to make up the protein; using distillers, tallow and liquid fats to replace the lipid component; and using beet pulp, soy hulls and brewers grains to compensate for fiber.

Producers in some states may have to worry more than others as the effect of the cottonseed situation varies depending on the geographical region. The farther the cotton has to travel, the more expensive it is going to be.

Dr. Russ Van Hellen, a nutrition consultant for Great West Analytical, LLP in Boerne, Texas, has clients in Colorado who are having a hard time even getting access to cottonseed. However, the majority of his clients locked in cottonseed prices through contracts.

Although some of these industry experts differ in their opinions of the severity of the situation, they all seem to agree that the West Coast, particularly California, has and will continue to be hit the hardest with cottonseed prices.

“The decent price of milk certainly is helping keep the large dairy producers at least partially tied to cottonseed,” Wedegaertner says.

The future of cotton is anybody’s guess
The bottom line, say nutritionists, is that although cottonseed may be expensive, the price is worth the benefits that producers receive from feeding it – that is as long as the supply and price hold out relative to other crops.

“Nobody is running out,” Argyle says. “But there is major competition for acres, and the price is dictating it.”

Producers seem to be taking the situation in stride this year, but the future may prove to present bigger issues. Just where will the supply be in a few years?

“It’s difficult to say,” Van Hellen says. “So much of this is weather- and rumor-driven.” Van Hellen feels that the future of cottonseed is uncertain because prices of corn increase daily, and byproduct feeds that can only be fed in ruminant rations are also increasing. Barmore believes ethanol will also have an effect on cottonseed supply.

“I think we’re in a time where it’s possible we won’t have access to the cottonseed that we’ve historically had,” Barmore says. “I certainly think there’s possibilities that this isn’t a one-time deal.”

Wedegaertner has a slightly different viewpoint. With an “it’ll get worse before it gets better” mentality, Wedegaertner believes U.S. yields will continue to decrease, but that eventually, China and India will begin to produce more food crops, such as corn and soybeans, instead of cotton, which will “cause the pendulum to swing back into cotton’s favor.” The agriculture industry has a way of “self-correcting” itself in a three- to five-year time period, he says.

“We’re optimistic that the current situation will change over the next year or two,” he says. “And then we’ll be back to where we were a few years earlier in terms of production." PD

Emily Caldwell
Staff Writer
Progressive Dairyman

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