An Analysis of the Cottonseed Pricing Structure in Texas
Misra, Sukant K.
Bondurant, Jane A.
MetadataShow full item record
The general objective of this study was to determine how variations in cottonseed supply factors, demand factors, and the five quality attributes reported under the current grading system (oil, ammonia, moisture, free fatty acids, and foreign matter) affect the price of whole cottonseed. It was found that cottonseed oil prices, cottonseed meal prices, moisture levels, free fatty acid levels, and foreign matter levels had statistically significant impacts on Texas cottonseed prices over the 1987-1996 marketing years. Results indicated that as cottonseed oil prices changed by 1 percent, cottonseed prices changed by about 0.33 percent. Cottonseed prices changed by about 0.40 percent as cottonseed meal prices changed by 1 percent. As moisture, free fatty acid, and foreign matter levels increased by one unit, cottonseed prices decreased by approximately 23 cents per ton, 4.56 dollars per ton, and 91 cents per ton, respectively. Results suggest that the current formula pricing system understates discounts for cottonseed moisture, free fatty acid, and foreign matter content