Strong demand, short supply lift cottonseed prices
Aug 27, 2008 10:51 AM,
By Hembree Brandon
Farm Press Editorial Staff
It is not without irony that, at a time when cotton acres have fallen drastically and newer varieties have smaller, less-weightier seed, demand for cottonseed is exceptionally strong and prices are high.
“Last year, new crop cottonseed in the Mid-South was $155 per ton; in late July this year, it was $310,” Austin Rose said at the summer meeting of the Southern Cotton Ginners Association at Biloxi, Miss.
Rose, president of Cape & Son, Abilene, Texas, and a 30-year veteran of cottonseed marketing, said the higher price reflects a sharply reduced seed volume from the acreage cutbacks as cotton has been replaced with corn and soybeans.
“We’ve seen a significant loss of tonnage as seed per bale at gins has dropped from 800 pounds to 700 pounds or less. This particularly hurts when cottonseed prices are as high as they are now. For 25,000 bales ginned, the dollar impact is some $375,000.”
Efforts continue, Rose says, to “try and get cottonseed companies to breed back some additional seed size and weight into their varieties.”
The impact of higher cottonseed prices on feed rations for dairies, a major user, has resulted in a decline from 6 to 8 pounds per cow per day to as low as 62 pounds, he says, “and some dairies have taken cottonseed out of their rations.
“Most dairies seem to be handling higher feed costs fairly well, with higher prices for milk offsetting the increases. Some of the more highly leveraged operations may see trouble, though.”
Demand has also been strong on the export side, Rose says. “We’re getting requests for quotes on thousands of tons for overseas shipments, but not much business has materialized because of shortage of supply and high transportation costs.”
Going forward, he says, “We hope the higher prices for cottonseed will influence the planting of more cotton, as producers and ginners look at the total value of cotton and not just the fiber.”
In other industry concerns, Mid-South farmers and ginners need to be careful they don’t run afoul of a slew of state and federal regulations pertaining to worker compensation, housing, transportation, migrant workers, and other issues, said attorney Ann Margaret Pointer.
“If you don’t comply with these very complex regulations, you could face some serious problems,” she told meeting participants who’d been lamenting a continually diminishing pool of seasonal labor.
Pointer, adjunct professor at Emory University Law School, has represented agriculture on labor issues for more than 30 years, and says employers must “know all the rules that apply” to workers and make certain they’re in compliance, or possibly face stiff fines/penalties.
A paramount rule, she says, is that of Respondeat Superior, or joint responsibility — in essence, the boss is responsible for actions by his employees.
“You need to be very careful who has your wallet and check-writing authority, because you can be held responsible.”
Particularly important, Pointer says, are rules applying to migrant workers and requirements for verifying identity and work authorization.
Mississippi and several others states have passed laws requiring all potential employed to be checked through the E-Verify system, an Internet-based program administered by the Department of Homeland Security, U.S. Citizenship and Immigration Service, and the Social Security Administration.
Failure to verify identity and work authorization can result in “significant fines, with criminal sanctions likely after the first violation.”
Pointer says employers must be vigilant in complying with all regulations relating to employee hiring, compensation, housing, transportation, etc., and be sure that all relevant paperwork is completed.
More detailed information may be obtained on the Web site www.laborlawyers.com.
e-mail: hbrandon@farmpress.com
