Cottonseed Feed Prices Pressed by Hurricanes

Cotton industry experts advise locking in delivered cottonseed bids.

Published on: Oct 5, 2005

Just before Hurricane Katrina made landfall, we issued a buying alert for dairy farmers expecting to lock in cottonseed feed supplies. That advice still stands.

Numbers are still coming in, but cotton industry experts say that high transportation costs will add insult to significant crop injury. Robert Nichols, senior director of ag research at Cotton Incorporated, says Extension agronomists have reported a 10% crop loss in Louisiana, a 10% loss in Alabama from Katrina and another 10% loss in Tennessee from the combined storms of Katrina and Rita.

"Four Mississippi State agronomists have independently assessed the crop damage either in their areas or statewide at about 20 to 25%," Nichols adds. Crop loss estimates for Arkansas and Texas remain outstanding.

USDA-ARS plant physiologist Bill Pettigrew, says the high velocities of wind and heavy rain from the hurricanes blew lint and seed from the cotton bolls to the ground, making the seedcotton unrecoverable. "Defoliation will be more challenging because of the excessive rain and higher fuel costs.”

Lock in delivered price

Neil Martin, cottonseed operations manager for Louisiana-based Terral River Service, Inc., says, "Dairy producers in the market for cottonseed should think strongly about booking 25 to 30% of their annual usage at current cottonseed values."

Tom Wedegaertner, director of Cotton Incorporated ag research, adds that rising energy prices have already increased fuel surcharges. "Per ton fuel surcharges of at least $15 have been reported," he warns.

"Dairy producers should lock in their cottonseed needs at a delivered price, which includes fuel charges, as opposed to origin prices. My advice is to buy cottonseed now, before the losses in the Mid-South crop are generally known." That’ll take a few more weeks, he concludes.