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Seed cotton is eligible for Title I Price Loss Coverage and Agriculture Risk Coverage programs under the 2014 Farm Bill.

Seed cotton details, new tools to help farmers make informed decisions

More details about the new seed cotton program are emerging, and growers look to know more about what the program means for them this year.

Cotton growers have some hefty decisions to make. The new seed cotton program applies to the 2018 cotton crop and may impact other covered commodities on farms, too, depending on how growers decide to use the program, especially in the Southeast.

The commodity covered by the program is called 'Seed Cotton,' which is unginned upland cotton that includes both lint and cottonseed. Seed cotton is eligible for Title I Price Loss Coverage and Agriculture Risk Coverage programs under the 2014 Farm Bill. The reference price for seed cotton is 36.7 cents per pound. This is a weighted average combo price for lint and seed

The National Cotton Council, which helped spearhead the development of the program and getting cotton back in Title 1, has scheduled seed cotton educational webinars Feb. 19 and 20. The seminars will include examples of support levels under various price scenarios and examples of generic base conversion options.

The NCC Feb. 13 also released the white paper ‘Seed Cotton PLC/ARC Program for Upland Cotton,’ which provides more details about the mechanics of the program.

Don Shurley and Adam Rabinowitz, both economists with University of Georgia Extension, released “MYA Prices and Calculating Payments with the Seed Cotton PLC.' The paper includes, among other things, what the seed cotton program market year average price would’ve been if the program had been applied each of the last ten years, or from 2008 to 2017.

Again, the reference price for seed cotton is 36.7 cents per pound. A PLC payment is made if the weighted actual MYA, or market year average, price is less than 36.7 cents. The MYA floor price is 25 cents. This means if the MYA is less than 25 cents, 25 is used. This effectively caps the PLC payment rate at 11.7 cents, according to the UGA Extension paper.

(Editor's note: This story was updated 6 p.m. Feb. 14.)

The National Center for Peanut Competitiveness launched Feb. 14 its “2018 Seed Cotton Generic Base and Payment Yield Updating Calculator,” which is being promoted by the Georgia Peanut Commission. The calculator is available at the Georgia Peanut Commission website.

“It is imperative for producers to begin the process of collecting the necessary data now rather than later, given the 90-day deadline in the law,” said Stanley Fletcher, director of the peanut competitiveness center. “Documents needed by the producer for this process will include the 2018 FSA-156EZ and the 2008-2012 FSA-578 forms for each farm serial number and the associated tracts for that farm serial number.”

The non-recourse marketing assistance loan for upland cotton lint remains unchanged in the 2014 Farm Bill with an upland cotton loan rate of 52 cents per pound for the 2018 crop, according to NCC.

To view the UGA Extension “MYA Prices and Calculating Payments with the Seed Cotton PLC,' click button below.

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