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New harvest adds to large old-crop stocks, but use higher

Progressive Dairyman Editor Dave Natzke Published on 19 October 2017
flooded cotton

The USDA’s Sept. 1 grain stocks estimates provided smaller-than-expected inventories for both corn and soybeans, initially giving some price support for both crops.

However, the impact faded relatively quickly, according to Todd Hubbs, University of Illinois ag economist.

The grain stocks report did confirm a strengthening in consumption which should have implications for both crops during the new marketing year.

  • Old-crop corn stocks in all positions on Sept. 1, 2017, totaled 2.29 billion bushels, up 32 percent from a year earlier. Of the total stocks, 787 million bushels were stored on farms, up 25 percent from a year earlier. Off-farm stocks, at 1.51 billion bushels, were up 36 percent.

    The stocks estimate came 58 million bushels lower than the average trade estimate and implied an uptick in feed and residual use during the fourth quarter of the 2016-2017 marketing year, Hubbs said.

  • Old-crop soybeans stored in all positions on Sept. 1, 2017, totaled 301 million bushels, up 53 percent from a year earlier. On-farm stocks totaled 87.9 million bushels, up 112 percent from a year ago. Off-farm stocks, at 213 million bushels, were up 38 percent.

Corn and soybean prices continued to be focused on the possibility of large U.S. harvest levels in 2017, Hubbs said.

Despite hurricanes, cottonseed supply, prices should be favorable for dairy

Despite hurricane-related crop losses in Texas and Georgia, there should be ample supplies of cottonseed at favorable prices for dairy feed, according to Cotton Incorporated.

The USDA’s estimate of the 2017 cottonseed harvest will be updated on Oct. 12, but current estimates forecast the largest crop since 2007.

While southern and rolling plains regions of Texas suffered significant losses and quality degradation due to Hurricane Harvey, the 41-county Texas High Plains is expected to yield one of the largest cotton crops in history. That area produces two-thirds of the Texas cotton crop and about 30 percent of the nation’s crop each year.

With plentiful cottonseed in the pipeline, cottonseed prices look favorable for dairy farmers, said Darren Hudson, professor of agricultural and applied economics at Texas Tech University, Lubbock, Texas.

After the hurricane-related bump in September, prices are expected to slide. Some large companies have placed large orders for delivered cottonseed, effectively setting a market floor. With sufficient sales orders, ginners may store seed hoping for better prices in 2018.

Others are actively marketing in anticipation of further price declines at the gin level, according to Nigel Adcock with Cottonseed LLC.

Recent USDA National Ag Statistics Service weekly crop progress reports indicate 60 percent of the cotton crop is in good to excellent condition, with harvest of the new crop slightly ahead of the five-year average. Reports regarding old-crop seed availability vary.

Tom Wedegaertner, director of cottonseed research and marketing, Cotton Incorporated, suggests producers get in touch with their cottonseed merchant or feed dealer to check prices.

Mycotoxins a problem

In Texas, where more than two-thirds of the 2017 corn crop had already been harvested, the Texas Corn Producers said mycotoxin levels in corn harvested on the High Plains were high enough to require testing and quality adjustments. Texas Corn Producers also urged corn producers to take appropriate steps to make sure they were eligible for federal crop insurance.

Mycotoxins were also posing feed quality problems in the Northeast, where this year’s growing season created conditions for mycotoxin development in small grains, forages and possibly silage. In addition to herd health concerns, one newsletter noted the presence of some toxins is throwing “false positives” for drug residues in milk from organic producers.  end mark

PHOTO: While the hurricane season has devastated some cotton-growing regions, reports show ample, quality cottonseed from the dominant cotton-producing Texas High Plains area. Photograph from Dwight Jackson, National Cotton Council representative, in Fort Bend County, Texas.

Dave Natzke
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