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Honored Advisor

Re: Record seed sales in SW

Jim 

Sorry to be slow on this one....

 

The statement on cotton seed came from a discussion with a crop insurance rep.  What do we do with corn not working ?  was the question.  

 

" From Enid Okla west through the texas panhandle and north into sw Ks the demand for cotton seed is at a record level"

 

It is an interesting question as to what that replaces.  We have a pretty unique issue right now... not seen in 50 years...  Corn basis in this area has matched central Iowa for nearly a year.  That equates to a 60 cent reduction in an area that is normally a high basis corn destination.  

Without regard to the 2 year fall in futures and the expansion of the overall basis. 

Also grain prices---- Corn has lost it's profit potential but that is not the wreck in that area, wheat is...  Wheat market is bad and even though grazing is normally the answer, cattle numbers are still down and yet the feeder market for cattle is taking the same fall as grain.  Two markets that normally go in different directions, cyclically.  Grain sorghum is 65 cents below corn and the seed mafia has it in control as well.... with prices approaching $200 per bag from the $60 of a few years back.(no technology in that product..)

 

So that region is considering options........should be and  ..... sounds like

 

 

 

But what gets replaced ---- Not that much irrigation with good water..... but that is a very low number of acres...  

Sounds like corn, grain sorghum and wheat........ in that order...getting the higher financial risk one replaced first...

 

Next I went to the banker and asked him about it....... Stevens County Ks alone is expecting 50K acres of additional cotton acres....

 

Reason............. difficult year expected and cash flow problems..... The loan rate for cotton is better than any of the grains...  That is a sad reality to our condition........ and there is still a good profit possible in cotton 

 

 

 

 

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