New Cottonseed Insurance Endorsement
Expands Cotton Risk Management Portfolio

Friday, December 10, 2010                       By Shawn Wade

      A two-year effort by Plains Cotton Growers, Inc. (PCG) to develop an all-new cottonseed insurance endorsement under the umbrella of the federal crop insurance program has cleared its final hurdle and is now ready to be offered to cotton producers throughout the Cotton Belt during the 2011 growing season.

      Officially known as the Cottonseed (Pilot) Endorsement, the product will be available for purchase as an optional insurance endorsement to cotton producers (Upland or Extra Long Staple) who purchase a qualifying buy-up policy of insurance on their cotton lint through the federal crop insurance program for the 2011 growing season.

      The Cottonseed Endorsement is best described as a companion endorsement that extends yield-only coverage to growers who purchase a qualifying APH-based buy-up plan of insurance (Yield or Revenue) under the new Combo Policy provisions for cotton. The endorsement will not be available to growers who purchase CAT, GRIP or GRP cotton policies.

      "From the start of this process in late 2008 PCG's goal has been to do everything we could to facilitate the development of an insurance product that cotton producers can use to insure some portion of the value of the cottonseed they produce," says PCG Executive Vice President Steve Verett.

      A prominent feature of the Cottonseed Endorsement was its establishment as a nationwide pilot program, which means the product will be available for purchase by growers in every cotton-producing county in the United States during its evaluation period.

      Premiums for the Cottonseed Endorsement will be calculated using a national cottonseed price (which has been set by USDA RMA at $0.09 per pound, or $180 per ton, for the 2011 growing season) and the premium rate applicable to the growers approved lint yield for Yield coverage under USDA RMA's Combo Policy provisions. Growers purchasing Revenue coverage on their cotton lint will also have their Cottonseed Endorsement premium calculated based on the rate applicable to Yield only coverage at their approved yield level.

      Premiums applicable to the Cottonseed Endorsement will qualify for the same level of federal premium subsidy as the producers underlying cotton lint policy.

      From an implementation standpoint, the Cottonseed Endorsement is designed to be easy to understand and administer and requires no additional record keeping by participating producers or insurance providers.

      To avoid producers having to provide additional cottonseed production records, cottonseed yields used to establish coverage under the endorsement will be calculated using a state-based cottonseed conversion factor multiplied by the producers approved cotton lint yield.

      The cottonseed production guarantee will then be determined by multiplying the resulting approved cottonseed yield by the coverage level selected by the grower for their cotton lint policy (Yield or Revenue). Multiplying the cottonseed production guarantee by the national cottonseed price established by the USDA RMA will determine the total value of coverage provided under the endorsement.

      In the event of a loss, growers incurring losses to their cotton lint sufficient to trigger an indemnity would be paid for the corresponding level of loss on cottonseed. Cottonseed losses will be determined by subtracting the cottonseed production to count (determined by multiplying the total production to count of cotton lint before quality adjustment by the cottonseed conversion factor) from the cottonseed production guarantee.

      For additional information about the Cottonseed (Pilot) Endorsement producers are encouraged to contact their insurance agent or crop insurance provider to learn how the endorsement can work for their operation.

 

December Crop Report Lowers High Plains
Production Estimate To 5.54 Mil. Bales

Friday, December 10, 2010                       By Shawn Wade

      A 250,000 bale drop in the Texas Upland cotton production estimate lowered expectations for the State's 2010 cotton crop from 8.3 to 8.05 million bales according to the USDA Crop Production report released earlier today.

      Looking at how those numbers apply to the High Plains shows that 80 percent, or 200,000 bales, of the decrease was attributable to lower expected yields in Texas crop reporting districts 1-N and 1-S. The remaining 50,000 bales was scattered among the state's other crop reporting districts.

      Specific changes for the High Plains in this month's report included the lowering of the average yield in district 1-N to 966 pounds per harvested acre, a decrease of 70 pounds per acre, and a less severe 15-pound drop in average yields for district 1-S to 678 pounds.

      These two changes dropped the production forecast in district 1-N by 110,000 bales, to 1.53 million, and in 1-S by 90,000 bales, to 4.01 million.

      Other details from the Texas crop production report include USDA Objective Yield Survey data collected between November 24 and December 1 for the December report that indicates average boll weights for the 2010 crop are the lowest recorded since 2005.

      Additionally, the survey's average count of bolls per acre indicates that the 2010 crop will average approximately 589 bolls per acre. Comparing the 2010 boll count number to the final counts reported for the 2005-2009 crop years in Texas shows this year's crop is second only to the 2007 crop, which averaged 632 bolls per acre, and slightly ahead of the 2005 crop's 585 boll per acre tally.

 

Want the facts about the U.S. farm policy. Get what you need at:
http://www.farmpolicyfacts.com

 

Cotton Quality Report

      The following is a summary of the cotton classed at the Lubbock and Lamesa USDA Cotton Division Cotton Classing Offices for the 2010 production season.

 

2010 High Plains Cotton Quality Summary

 

Current Week:

 

Office

Bales

Color

Leaf

Staple

Lamesa

104,068

21+ - 87.2%

31 - 8.8%

1.96

35.37

Lubbock

375,720

21+ - 86.0%

31 - 11.5%

2.20

35.97

 

Mike

Strength

Uniformity

Bark

Lamesa

4.31

29.51

80.56

6.0%

Lubbock

4.03

30.30

80.49

8.3%

 

 

Season Totals To Date:

 

Office

Bales

Color

Leaf

Staple

Lamesa

856,549

21+ - 83.7%

31 - 11.1%

2.25

35.32

Lubbock

2,813,603

21+ - 86.4%

31 - 9.2%

2.39

35.98

 

Mike

Strength

Uniformity

Bark

Lamesa

4.40

29.62

80.74

7.9%

Lubbock

4.01

30.30

80.61

7.4%

Source: USDA AMS

 

2011 Beltwide Cotton Conf. Program Released;
Early Registration Ends December 14

      The National Cotton Council (NCC) has announced the final program for the 2011 Beltwide Cotton Conferences to be held January 4-7, 2011 in Atlanta, GA. This year's Beltwide will feature a slightly revamped schedule designed to allow greater availability of key workshops to growers and other conference attendees.

      It should also be noted that individuals interested in attending the 2011 Conferences are being reminded that December 14, 2010 marks the deadline for Beltwide participants to receive discounted pre-registration pricing and also discounted room rates at the Atlanta Marriott Marquis hotel, the 2011 Beltwide host hotel.

      Complete information about the 2011 Beltwide conferences, including a downloadable final program and links to online registration and hotel reservations, are available through the NCC's Beltwide Cotton Conference web page:

http://www.cotton.org/beltwide/

      NCC and Cotton Foundation members along with researchers, consultants, Extension personnel and association representatives can register for $125 through December 14. After that date, the registration cost is $150 for members of those groups.

      Registration and housing reservations can be easily completed online by visiting the BWCC website, and clicking on the respective registration and housing links. Room reservations must be made by December 14th to ensure the conference rate. Room reservations can be made online (http://cwp.marriott.com/atlmq/beltwidecottonconference) or by calling the Atlanta Marriott Marquis directly at (866) 469-5475.