Upland Cotton Average Price Received by
Growers Through December 2007

Friday, February 1, 2008                            By Shawn Wade

      With USDA on the verge ofmaking its’ decision to offer an advance 2007 Upland Cotton Counter-cyclical(CC) payment, the big question on the minds of many cotton growers is how muchthe current trend toward higher prices will impact that decision. At firstglance that answer seems to be “a lot.”

      With a preliminary mid-month price of 61.40 cents per pound reported forJanuary 2008, continuing the recent upward trend in cotton prices, it appearslikely that when USDA officials sit-down to make their decision it will requirethe use of a much sharper pencil than they have had to use in recent years.

      With the firstfive months of the 2007 Upland Cotton marketing year now past, the calculated2007 Weighted Average Price Received by growers through December 2007 stands at53.46 cents per pound.

      The good news isthat this is only 1.46 cents above the 52-cent threshold where the UplandCotton CC payment rate begins to shrink, leaving the door open for USDA tooffer an advance on a final projected 2007 Counter-cyclical program payment.

      The bad news for anyonecounting on an advance payment is that all signs are pointing to a finalprojected payment rate below the 2002 Farm Bill’s maximum CC payment rate of13.73 cents. The challenge for USDA is predicting how the rest of the marketingyear will go and what the final Average Price Received by growers will be.

      USDA’s decisionto offer an advance 2007 CC payment will hinge on their confidence in cottonsales remaining relatively steady through the end of the marketing year, whichis less than certain, and where they believe cotton’s recent upward price trendwill plateau.

      A cursory look atwhat it would take for the final Average Price Received by growers for the 2007marketing year to finish above the 65.73 cents per pound level, and result in azero Counter-cyclical payment calculation, shows that such a result ispossible, even though it is just as likely that the Average Price Receivedcalculation will fall short of that mark.

      Looking at theDecember 2007 numbers more closely shows that cumulative Upland Cottonmarketings for the first five months of the 2007-marketing year have totaled6.077 million-bales according to information released January 31 by the USDANational Agricultural Statistics Service.

      That figure isnow 248,000 bales behind the amount marketed through the same period last yearthanks to December 2007 marketings that were estimated at 1.529 million baleswith an average selling price of 59.2 cents per pound.

      The Decembermarketing figure reflects the significant slow down in sales that occurred whenprices started to increase and is 25 percent less the 2.062 million balesmarketed in December 2006. From this point an additional 9.675 million baleswill need to be marketed to match last year’s total marketings of 15.75 millionbales.

      To reach thatlevel, sales of U.S. cotton must average 1.38 million bales per month fromJanuary through July 2008.

      The followingtable shows the average price received each month by farmers and the associatedweighted average price based on prices and cumulative marketings from August 1through December 31, 2007.

      The2007 Counter-cyclical payment rate authorized under the 2002 Farm Bill will bebased on the 12-month Weighted Average Price Received by growers. For cottonthe 12-month Weighted Average Price will reflect price and marketings for the2007 marketing year. The 2007 cotton marketing year began August 1, 2007 andends July 31, 2008.

Average Price Received For2007-crop Upland Cotton (Weighted by Marketings)

 

Marketings

Prices

 

(000's of Running bales)

(cents/Lb.)

 

Monthly

Cum.

Monthly

Weighted

August

1,762

1,762

44.90

44.90

September

373

2,135

52.00

46.14

October

949

3,084

55.20

48.93

November

1,464

4,548

57.00

51.53

December

1,529

6,077

59.20

53.46

January

n/a

n/a

61.40*

n/a

Source: National AgriculturalStatistics Service; * = preliminary

 

PCG’s2008 Seed Cost Calculator Ready
For Download; Includes 128 Varieties

Friday, February 1, 2008                           By Shawn Wade

      An updated version of the2008 Plains Cotton Growers Seed Cost Calculator is now available. Growersinterested in comparing prices for their 2008 planting seed options candownload the calculator at http://www.plainscotton.org.

      The 2008 version includes 129conventional, Roundup Ready, Roundup Ready FLEX, Liberty Link, Bollgard andBollgard II and Widestrike varieties, as well as numerous stacked gene versionsof these technologies that will be available for sale in West Texas in 2008.Should information on additional varieties become available, an update to thespreadsheet will be developed and posted on PCG's website.

      The PCG calculator is aninteractive Microsoft Excel spreadsheet that allows producers to calculate anestimated cost per acre, for both seed and technology, based on publishedsuggested retail prices.

      The web page also includeslinks to the free program Open Office. Open Office can open and run Microsoft Excel spreadsheets for usersthat do not have Microsoft Excel on their computers.

      The PCG calculator retainsall of the functionality it had in 2007, including the ability for a grower toselect up to nine varieties, from the list companies have said will beavailable in the West Texas market in 2008, for side by side comparison.

      The calculator also givesgrowers the ability to see how various seed and technology combinations compareon a per-acre cost basis using their own target seeding rate expressed inplants per acre or calculated as a function of row width and number of seedplanted per foot of row.

      The PCG spreadsheet will alsoshow how much of a grower's per-acre cost is attributable to the cost of seedand technology, respectively, and the amount of change that occurred from 2007levels.

      Additionally, the calculatorincludes separate worksheets that group varieties by type (Conventional;Roundup Ready, Liberty Link & Liberty Link/Bollgard II; Roundup Ready FLEX;Roundup Ready FLEX with Bollgard II or Widestrike; Bollgard/Bollgard II,Roundup Ready with Bollgard/Bollgard II technology, and Roundup Ready withWidestrike technology).

      Details about 2008 Replantand Drought Relief programs from seed providers will be posted on the PCGwebsite as soon as they are made available to us. Several companies have notyet published details of their 2008 programs as of the release date for thecalculator. Growers are encouraged to check the PCG website regularly forfuture updates to this information.

 

Wantthe facts about the U.S. farm policy. Get what you need at:

http://www.farmpolicyfacts.com

 

2007-CROP HIGH PLAINS COTTON QUALITY SUMMARY

 

 

Week Ending January 31, 2008:

 

Office

Bales

Color

Leaf

Staple

Lamesa

83,611

21+

2.62

35.68

Lubbock

128,455

21+

2.77

35.95

 

Mike

Strength

Uniformity

Bark

Lamesa

4.17

29.14

80.59

14.3%

Lubbock

4.04

29.33

80.69

8.3%

 

 

Season Totals To Date:

 

Office

Bales

Color

Leaf

Staple

Lamesa

1,207,590

21+

2.38

36.03

Lubbock

3,392,895

21+

2.46

36.01

 

Mike

Strength

Uniformity

Bark

Lamesa

4.20

29.79

80.85

6.3%

Lubbock

4.06

29.57

80.62

2.9%

Source: USDA AMS Cotton Division

 

2008Texas AgriLife Extension Service Production Conference Dates

 

Date:

Name/Location/Information:

Feb. 5

Sandyland Agriculture Conference

Location: Gaines County Civic Building, 402 N.W. 5th, Seminole.

Information: Registration begins at 8:00 a.m. and conference will continue until 4:00 p.m. There is not a registration fee and a meal will be provided. Five CEU’s are pending approval. Call the Extension office in Gaines County at 432-758-4006 for more details.

Feb. 6

South Plains Agriculture Conference

Location: American Legion Hall, 800 Seagraves Rd., Brownfield.

Information: Registration begins at 8:00 a.m. and conference will continue until 3:45 p.m. There is not a registration fee and a meal will be provided. Five CEU’s are pending approval. Call the Extension office in Terry County at 806-637-4060 for more details.

Feb. 6

Hale and Swisher County Crops Conference

Information: Call the Extension office in Hale County at 806-291-5267 or Swisher County at 806-995-3726.

Feb. 20

Cotton Production Workshop

Information: Call the Extension office in Lubbock County at 806-775-1680.

Source: Texas AgriLife ExtensionService