The National Cotton Council (NCC) is currently involved in aiding cotton producers to better understand the impact and details of the recently authorized 2018 seed cotton program. Effective with the 2018 crop, seed cotton is now a covered commodity under Title I of the 2014 farm bill and eligible for Price Loss Coverage (PLC) payments. For purposes of the legislation, seed cotton is considered unginned upland cotton—a combination of both lint cotton and cottonseed. Seed cotton is eligible for both PLC and Agricultural Risk Coverage (ARC).
Understanding how the program works and the details of the program as currently known, the NCC is in the process of staging regional webinars to help producers get up to speed on how the program will work and how it might benefit their cotton operations in the 2018 season.
According to the National Cotton Council's Dr. Jody Campiche, NCC vice president, Economics and Policy Analysis, the Reference Price for seed cotton is 36.7 cents per pound, a price figure fixed in legislation and does not change.
Campiche notes this is a weighted average combo price for lint and seed based upon historical acres and yields. A PLC payment is made if the weighted actual market year average price is less than 36.7 cents. The market year average 'floor price' has been set at 25 cents.
For producers, this means if the market year average is less than 25 cents, 25 is used for the purposes of the program. In effect, this limits the PLC payment rate at 11.7 cents overall.
A formula for determining the appropriate payment rate can be calculated based upon information available on the NCC website.
The NCC is staging a number of regional webinar conferences this week and throughout much of Feb. to explain the program and how it works for the benefit of producers and crop oonsultants. They invite NCC members and interested organizations to participate in one of those regional information conference calls and webinars regarding provisions of the recently authorized 2018 Seed Cotton farm program as it applies to their specific growing region.
During those calls/webinars, information will be provided on the provisions of the Seed Cotton program, including examples of support levels under various price scenarios and examples of generic base conversion options. In addition, updates on the new farm bill are bring provided.
To determine the dates and times of the webinars relevant to your location, visit the NCC website for additional information and conference schedules. In addition, take the time to listen to the podcast (above) for general information. The podcast was recorded during one of the conference meetings last week.