Cotton: With New “Seed Cotton” Program, 3 Key Points To Consider

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Unthinkable at one time, but thanks to the diligent efforts of many within our industry, cotton is once again considered a covered commodity under Title 1 of the 2014 Farm Bill.

Beginning with the 2018 crop , generic base can be converted to “seed cotton” base eligible for PLC payments. The seed cotton program is somewhat different than cotton programs in previous Farm Bills.

Payment calculations now take into consideration both lint prices and cotton seed prices. At first glance the new program may appear daunting and complicated. However, once the new terminology is understood, it’s really not. See information prepared by Don Shurley, University of Georgia economist, which is the best explanation I’ve seen to date on how payment calculations are made and applied.

In addition, the National Cotton Council will be conducting a series of webinars over the next few weeks wherein the seed cotton program will be explained in detail. I have attached a schedule of these webinars and strongly encourage you to participate in one or more.

Finally, let me leave you with three points.

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First, convert your generic base back to program base by visiting your FSA office. That’s your first order of business. You have 90 days in which to do this.

Second — and most importantly, despite all the noise surrounding this program – it should not influence your planting decisions.  As with other covered commodities, payments are based on your planting history, not what is currently planted.

Payments, if they are any, will be paid whether you’re planting the crop or not. My friend and colleague, Don Shurley, said it best – “Plant for the market, not the payment.”

Third, use this winter to educate yourself on the program by gathering as much information as you can.

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