Cottonseed supply could be up this year

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While 2009 cotton acreage is projected to decrease for the fourth consecutive year — to the lowest levels since 1983 — experts anticipate that cottonseed prices will remain "surprisingly reasonable." That's because planting numbers alone do not tell the full story.

"Compared to the 2008 cotton crop, where abandonment was unusually high at nearly 20 percent, we may actually see slightly more cottonseed supply produced on fewer acres in 2009," says Tom Wedegaertner, director, cottonseed research and marketing, Cotton Incorporated.

According to the USDA's March 31 "Prospective Plantings" report for 2009-2010, cotton acreage is expected to shrink by 7 percent, down to 8.81 million acres.

"While 7 percent is significant, it is important to note that cotton acreage has dropped by double-digit percentages for the past two years," says Wedegaertner. "This lower rate of decline may be a sign we've hit the bottom from an acreage standpoint, and that cottonseed prices could be stabilizing.

Additionally, with favorable growing conditions and a return to historical average abandonment rates, it is possible that the 2009 cottonseed supply could meet or exceed last year's supply."

USDA's March 31 report increased anticipated cotton acreage by more than 700,000 acres since earlier industry projections. "The added acreage was a nice surprise, especially for the dairy producers who rely on this important feedstuff," says Wedegaertner. "Several market and weather factors contributed to the increase."



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