A challenging feed price situation may get even dicier for dairy farmers this fall and winter, starting with cottonseed availability and cost.

That’s because cotton production was down this year for a variety of reasons. And the need for supplemental feeds is high —especially in the drought-ravaged Southwest. Those factors have combined to create cottonseed prices that are nearly double that of an average year, according to experts with the Texas AgriLife Extension Service.

Though some recent rains greened up pastures and rangeland and gave winter wheat producers some hope, forage and hay remained scare throughout the state, according to county agents. But despite these rains, as late as last week the entire state remained in one stage of drought or another, with more than 70 percent of Texas under severe to exceptional drought conditions, according the U.S. drought monitor.

As a result, livestock producers are looking more to alternatives such as whole cottonseed, according to Mark Brown, AgriLife Extension agent in Lubbock County.

He reports that cottonseed is selling for $340 per ton due to feed shortages and short supplies.

A lot of farmers would be glad to pay $340 per ton, if they could find it at that price, notes Ellen Jordan, AgriLife Extension dairy specialist based in Dallas. It’s all about supply and demand, and the drought.

“Demand is going to surpass cottonseed supply this year by far,” Jordan says. “Not only do we have the dairies looking for cottonseed, but people are looking for cottonseed to extend their forage supply to their beef cattle.”

Regional feed prices in Comanche were $398, and $393 per ton in Friona on Oct. 26 – 27, Jordan reports.

On an average year, when demand isn’t so high and there’s a better cotton crop, prices usually hover around $200 per ton.

Meanwhile, the corn market continues to put pressure on dairy margins. Doane Advisory Services analysts report that corn rallied yesterday, with late session short-covering and bargain hunting helping to push prices higher into the close. December closed 7 1/4 cents higher at $6.54 1/4 and March was 6 1/4 cents higher at $6.65 1/4.

The soybean situation may be headed in a different direction, though. Soybean futures traded strongly lower on Tuesday. The sharp rally in the dollar and weakness in equities and crude oil weighed on the market. Outside markets were pressured by renewed concerns about the European Union debt crisis and its potential affect on the global economy. Losses were still double digit, but early session declines were trimmed by some short-covering and ability of corn to turn higher, note the analysts from Doane. November ended 15 1/4 cents lower at $11.92 1/4 and January was 14 3/4 cents lower at $12.02 1/2. 

But forage availability remains concerning for dairy farmers.

For instance, the Wisconsin Agricultural Statistics Service says that the state’s alfalfa hay harvest ran about 18 percent below last year’s level, due to slightly lower yields and fewer acres harvested. Wisconsin's production of other types of hay is about, 3 percent below last year.

Nationally, U.S. alfalfa production is down about 5 percent. And other hay production came in about 14 percent lower than last year.