Upland Cotton Average Price Received by
Growers Through December 2008

Friday, February 6, 2009                            By Shawn Wade

      Cumulative Upland cotton marketings for the first five months of the 2008-marketing year totaled 3.576 million bales according to information released January 30, 2009 by the USDA National Agricultural Statistics Service.

      That figure is 2.5 million bales below the 6 million bales marketed through the same period for the 2007-crop. The low numbers reinforce the reality of the lagging pace of cotton consumption worldwide. The figures are also expected to support forecasts for a further reduction in total cotton acres planted in the U.S. and around the world during the 2009 growing season.

      According to the USDA report, estimated December 2008 marketings totaled only 781,000 bales. The average selling price reported for the month was 51.9 cents per pound.

      Based on these figures, the 2008 Upland Cotton Weighted Average Price calculated through December 2008 stands at 54.53 cents per pound. With the first five months of the marketing year now past, the calculated 2008 Weighted Average Price continues to fall closer to the 52-cent Upland cotton Base Loan rate.

      Price forecasts for the remainder of the 2008 marketing year are following the same downward trend as well. The preliminary mid-month price reported for January 2009 was 47.40 cents per pound.

      Lower price expectations were also echoed in the recent announcement of an advance 2008-crop Counter-cyclical payment rate of 5.03 cents, which is 40 percent of the maximum possible Upland cotton CC rate of 12.58 cents per pound.

      The following table shows the average price received each month by farmers and the associated weighted average price based on prices and cumulative marketings from August 1 through December 31, 2008.

      The 2008 Counter-cyclical payment rate authorized under the 2008 Farm Bill will be based on the 12-month Weighted Average Price Received by growers. For cotton the 12-month Weighted Average Price will reflect price and marketings for the 2008 marketing year. The 2008 cotton marketing year began in August 1, 2008 and ends July 31, 2009.

Average Price Received For 2008-crop Upland Cotton
(Weighted by Marketings)

 

Marketings

Prices

 

(000's of Running bales)

(cents/Lb.)

 

Monthly

Cum.

Monthly

Weighted

August

1,144

1,144

56.50

56.50

September

95

1,239

61.10

56.85

October

578

1,817

55.50

56.42

November

978

2,795

53.10

55.26

December

781

3,576

51.90

54.53

January

na

na

47.40*

na

Source: National Agricultural Statistics Service; * = preliminary

 

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Profitability Workshops An Opportunity To
Learn How To Evaluate Potential Crop Mixes

      Figuring out what to plant to maximize profit is a yearly task for farmers. Unfortunately, that task is often complicated by the fact that a farmer may not have all the information they need to accurately weigh the pros and cons of a particular crop selection or mixture of crops.

      To remedy that situation, and provide farmers an opportunity to learn how to use new analysis tools, the Texas AgriLife Extension Service has scheduled two "Profitability Workshops" at the Texas AgriLife Research and Extension Center in Lubbock. The first workshop will be held February 17 and the second will be held March 5.

      Instructors for the workshop include: Dr. Jackie Smith, Extension Economist; Jay Yates, Extension Risk Management Specialist; Dr. John Robinson, Extension Cotton Marketing Economist; Jeff Pate, Extension Risk Management Specialist; and Mark Welch, Extension Grain Marketing Economist.

      The workshops will begin at 9:00 a.m. and conclude at 4:00 p.m. on both dates. Registration for the workshop is $20. Call Wendy Durrett at 806-746-6101 to make a reservation or to obtain additional information about the workshop.

      Included in the $20 workshop registration fee are packets containing printed copies of the workshop presentations, 21 crop budgets and a CD containing a copy of the "Comparative Profitability Spreadsheet" that the workshop is centered around.

      This spreadsheet is a Microsoft Excel file and includes budgets, breakeven tables, and etc. Also on the CD will be supporting files and web addresses that will help each participant use the spreadsheet.

      The primary objective of this workshop is to provide farmers the tools and the data along with the skills to evaluate the potential profitability of alternative crops for the 2009 crop year. In today's high cost, low price farm economy, increasing a grower's ability to examine the economics behind each potential crop choice is critical.

      In addition to the Profitability Workshop there are several other meetings and events on the calendar between now and planting time that will be of interest to growers.

      Meeting dates and locations are:

Feb. 10 - Hale and Swisher County Crops Conference, at the Ollie Liner Center in Plainview. Call the AgriLife Extension office in Hale County at 806-291-5267 or Swisher County at 806-995-3726 for more details.

Feb. 11 - South Plains Ag Conference, will be held at the American Legion Hall on Seagraves Rd in Brownfield, TX. Registration begins at 8:00 A.M. and lunch will be provided. Call the AgriLife Extension office in Terry County at 806-637-4060 for more details.

April 1 - Lower Rolling Plains Ag Conference, at the Scurry County Coliseum. Call the AgriLife Extension office in Scurry County at 325-573-5423 for more details.

April 1 – Cotton Economics Research Institute 9th annual Research/Outreach Symposium, at the Merket Alumni Center at Texas Tech University. For more information contact CERI at 806-742-2821.

April 1 - Cotton Price Risk Management and Pricing Strategies Seminar, at the Holiday Inn & Towers. Seminar sponsored by Cotton Incorporated in cooperation with Plains Cotton Growers, Inc. Space is limited so please register to reserve your seat by contacting Kay Wriedt at 919-678-2271 or kwriedt@cottoninc.com

April 2-3 – Texas Cotton Ginners' Association Trade Show and Convention, at the Lubbock Memorial Civic Center.

April 3 – Plains Cotton Growers, Inc. 52nd Annual Meeting, at the Lubbock Memorial Civic Center.

 

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