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Serving: IN

Cotton Economics Felt By Indiana Dairymen

Strange set of circumstances prices cottonseed out of dairy rations.

The days of feeding dairy cows corn, soybean meal, enough minerals to support the cow and hay went by the wayside years ago on many dairy farms. Nutrition consultants have helped dairymen improve rations and reduce costs with a variety of ingredients, including wheat straw, added for rumen health, and cottonseed meal, which can be a protein source. Recently though, events in the deep South, several states removed from Indiana, have changed what goes into the ration for dairy cows on many farms here in the Hoosier state.

"We like to use cottonseed in the ration, and have in the past," explains Joe Kelsay, Kelsay and Sons Dairy, Whiteland. Kelsay and family milk over 500 cows. "The problem today is that cottonseed meal is just too expensive to earn a place in the ration."

That's true, he notes, even though soybean meal remains relatively high. And with milk prices down nearly $10 per hundredweight from last year, running just over half of what they were last summer, it's essential to find the most cost-effective ingredients in the ration for lactating cows.

Wait a minute, you say, isn't cotton selling at low prices, with cotton farmers suffering through tough times. Didn't many try switching back to corn and soybeans, even though they're less competitive from an agronomic standpoint in many cases, when prices for these latter two commodities skyrocketed a couple years ago?

The answer on all counts is yes. So we turned to Pam Golden, editor of Southern Farmer, a sister publication to Indiana Prairie Farmer, to provide an explanation. The magazine she edits covers a wide range of territory, form the southern Indian border to the Gulf in some parts of the country. Much of the area served by the magazine is traditional cotton country.

"What I see that's impacted the price of cottonseed meal is fewer cotton acres and more people feeding it," Golden says. It boils down to the law of supply and demand, she notes- supply is down for this by-product, and demand is up.

The U.S. produced 23.3 million bales of cotton in 2004, she says. Then prices trended lower for cotton, especially compared to other competing commodities that farmers could choose to grow. Only 13 million bales were produced in eh U.S. altogether in the most recent growing season- 2008.

"Couple a 10-million bale crop with hay shortages in drought-stricken areas of the country over the last three years, and we certainly have a seller's market for cottonseed," Golden says. Much of Indiana was part of that drought-stricken area two seasons ago, leading to skyrocketing hay prices which have yet to settle back all the way to pre-'87 drought levels.

Ironically, cotton sold as cotton itself remains low-priced. "I wish cotton itself had that demand," Golden concludes.

TAGS: Soybeans
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