22
Mar
Prices are higher due to a large volume of trade last week. Many dairies from Texas, Idaho and California purchased April through September cottonseed. As I’ve said many times, this year’s production is down 35% from last year, consumption for the first six months of this crop year seems to have stayed consistent to last year’s inclusion rate, and cottonseed oil mills (crushers) have very good margins that will most likely hold through the end of 2021. Now, dairy consumption April through September 2021 has to decrease 50-70% because the cottonseed does not exist. This is a very tall order and so far, with all that traded last week, it doesn’t feel like nutritionists or dairies are looking to pull back on cottonseed usage enough to get close to a 50-70% reduction. The market will have to do this at some point through higher, probably much higher, prices. Dairies that act now will keep more in the ration at current values and those that wait will most likely take it out completely due to, beyond reasonable, high prices.