Pricing for 2022 Summer Texas Crops—Some at Record Highshs

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This document provides recent market and contract pricing and contacts for a dozen Texas crops.

 

Prices for major commodity crops corn, cotton, and grain sorghum are especially strong at this point in 2022.  AgriLife Extension economists Dr. John Robinson, cotton, john.robinson@ag.tamu.edu and Dr. Mark Welch, corn and sorghum, mark.welch@ag.tamu.edu, are writing and speaking frequently on high prices and strategies for crop marketing.

 

The February 2022 invasion of Ukraine has shaken world markets especially for wheat.  Ukraine is a large exporter of winter wheat.  The country also planted 32% (16 million acres) of world oilseed sunflower in 2021.

 

For many, pricing a 2022 crop could be as simple as working through your cotton gin pool or signing a grain contract at a pre-determined price based on Dec2022 futures.  Here are some factors that affect this decision:

 

  • First, for cotton, corn, and grain sorghum, when prices are as high as they are, ask yourself “Which is more likely—prices go even higher or fall?”  Some might say, ‘Tell me what will happen from the instability due to Ukraine?’  Or fuel prices.  Dr. Welch noted to an Amarillo Extension workshop last month that when prices are high like this, at least for grains, about 2/3 of the time they do fall.
  • Locking a good price now could protect a farmer if inputs remain expensive but crop prices fall.
  • What about rain?  Much of Texas is bone dry right now.
  • What about crop insurance?  Base prices for insurance will also be higher.

 

Corn & Grain Sorghum

 

Corn can be traded on the futures market, most likely Dec2022.  Puts, options, and other tools I do not understand.  But it is basic if you decide to price a portion of your crop and sell it now, then grow that crop.  These grain prices may vary as follows:

 

  • Corn.  Since the Texas High Plains is a net importer of corn grain (beef cattle feedlots), local bids are often ~$0.50/bu above Dec2022.  Corn prices have surged about $1/bu on Dec22 since the Russian invasion of Ukraine.
  • Grain sorghum—High Plains.  Since there is no commodity board trading and pricing, grain sorghum is priced relative to corn Dec2022.  Currently, grain sorghum in the Texas High Plains is about $0.10 to $0.30 above Dec2022 corn for delivery.  This puts grain sorghum in the range of $11.75 to 12.15/cwt. These prices have resisted the surge in corn prices, which probably helps manage the added risk of these near record high prices in grain sorghum.
  • Grain sorghum—Texas Gulf Coast.  The proximity to export terminals (Corpus, Houston? Beaumont?) strengthens prices due to China demand.  I hear at least 70% of the Texas grain sorghum crop in 2021 is now in or headed to China.  Contact elevators in your region for pricing options vs. projections of late summer/fall cash bids, which for now is an existing crop.

 

Lesser Crop Commodities—Prices, Contract, and Buyers

 

I will list what I know for current prices and locations.  This is not a complete list.  But it should give you a flavor of what may be available.  These lesser crop contracts are normally acres not yield.  In most cases you are not at risk if you lose the crop.  But be sure you understand the contract language.  Each contractor can fill in the needed details.

 

Sunflower—Oilseed & Confectionary

 

Confectionary pricing is at record high prices, but Texas processors have backed off contracting here due to supply from the Dakotas.  Some Red River Commodities customers in the Texas Panhandle are delivering to southwest Kansas at $40/30 cwt. for the two sizes of seed relative to 22/64”.  Texas A&M AgriLife data in the High Plains indicates oilseed sunflower yields more per acre, but confectionary have a moderately higher crop value per acre (and more than the slightly higher confectionary sunflower production cost).

 

For oilseed sunflower, contract prices may increase due to the 2022 invasion of Ukraine.  Ukraine harvested 16 million acres, or 32% of world oilseed acres in 2021.  Conversely, sunflower oil end users may opt to switch to other oils like palm, coconut, and especially soybean.  This would cap prices on sunflower.

 

Standard pricing on oilseed sunflower has a “2-for-1” premium/discount relative to 40.0% oil.  For example, if sunflowers are 41.0% oil priced at $28/cwt., then the grower will receive a bonus of $0.56/cwt (and an equal discount if 39.0% oil).  The average percent oil content in Texas sunflowers in the past 20 years is about 41%.  Fields that have lower %oil typically were planted late (not fully mature) or had significant environmental stresses.

 

  • Eastern Colorado Seeds. Burlington, CO/Dumas, TX/Clovis, NM.  Into early March oilseed contracts for 2022 available at $28/cwt. plus oil premium.  (719) 342-9316, Clay Smith, smith@ecseeds.com.  Delivery is Olton {Texas Best Bean, (806) 285-3144)}, and Dumas (Oglesby).  ECS has now paused new bids to better assess the added risks now in the market due to Ukraine.
  • Colorado Mills. Lamar, CO.  (719) 336-8452, Kevin Swanson, kevin@comills.com.  Deliver direct to Lamar.  Recently contracting high oleic ~$31.00/cwt and NuSun at $1 less.
  • Red River Commodities. Lubbock, TX. (800) 763-9740, Larry Martin, larrym@redriv.com  Oilseed contracts for birdfood at $30/cwt. with no check for oil content.  Delivery locations include Lubbock, east of Petersburg, Hale Center, Barwise.  Use any oilseed hybrid.
  • Garcia Grain. Lower Rio Grande Valley, (956) 279-6207, Octavio Garcia.  Sunflowers are exported to Mexico.
  • Central Texas? Contract have been offered in recent years for delivery to Bardwell.  This market appears to be quiet for 2022 though some production may occur for birdfood in the Brazos Valley.

 

Sunflower is federal program crop insurable for many counties in Texas.  A written agreement is possible in other counties.  See the Texas map and final planting dates for full coverage at https://www.sunflowernsa.com/uploads/25/TexasandOklahomaFinalPlantingDates.pdf

 

Black-eyed Pea

 

Black-eyed peas are a good rotation crop as there are not many legumes used in Texas crop rotations.  Prices for all buyers are in the range of $0.50/lb. for cleaned grain.

 

  • K. Nickels Co., Muleshoe. Contact RayAn Dosher. (806) 272-5589 or Chad Nickels M (806) 946-9760, chad@cknickels.com, delivering in Muleshoe.
  • T. Smith/Peas Inc., Pleasanton, TX. Call the office (830) 569-2140, or field production manager Jose Balli, mobile (210) 867-9367.  Will consider contracts across the state with delivery on the turnrow.
  • Texas Best Bean, Olton. Bobby Redwine, (806) 285-3144, texasbestbean@hotmail.com.  Delivery in Olton.
  • New Deal Grain Inc., New Deal. Office (806) 784-2750, Peter Poff, peter@newdealgraininc.com, or Seth Fortenberry, sfortenberry@newdealgraininc.com
  • Gladiator Proteins, Sudan. Jason Trotter, M (806) 891-3594, jtrotter@gladiatorproteins.com

 

Sesame

 

Crop contract prices for sesame are the highest I have known in 23+ years in Texas.  See the post to Row Crops Newsletter for March 4, 2022.  A primer on sesame production in Texas is online at http://lubbock.tamu.edu/sesame  See this document for information about federal crop insurance for sesame.

 

For further sesame production and contract information, contact the following.  Prices are from February.  Also, the sesame industry typically pays premiums for clean grain, low seed cracks, and desired color.  Sesame in Texas is not currently priced to reflect oil content.  Delivery may be arranged on the turnrow.

 

  • Sesaco Corporation.  $0.55/lb. Jared Johnson, jjohnson@sesaco.com, (405) 531-7840.  Delivery locations vary.  Sesaco has a seed cleaning facility in Hobart, OK.
  • Equi-nom & cooperating contractors/elevators.  $0.55/lb.  Equi-nom is a genetics company with seed which are available to contractors.  Equi-nom is not the buyer.  Joe Guzman, joeg@equi-nom.com, M (806) 241-6666.  Current opportunities with Equi-nom include Garcia Grain in the Lower Rio Grande Valley and several elevators in southwest Oklahoma.
  • Sesajal.  $0.56/lb.  First full year of sesame contracting in Texas.  $0.56/lb.  Field contact is agronomist Fernando Garcia, San Antonio, TX, fernando.garcia@sesajal.com, (210) 306-0998.  Sesajal is building sesame processing at Hondo, TX.

 

Soybean

 

Texas is minimally a soybean producer.  Limited markets are available in far northeast Texas, the Texas Coastal Bend, and the Texas Panhandle.

 

Guar

 

Guar Resources, Brownfield, TX, has suspended operation for guar processing due to continued dirt-cheap guar import prices for guar gum and guar splits.  The 2020 price was $0.175/lb. delivered to Brownfield.  This price is low relative to historical prices.  Guar is a heat-tolerant, drought-tolerant crop that works well in dryland crop rotations.  I hope it returns to Texas with improved prices soon.  Also, guar is being evaluated under a Texas A&M AgriLife sub-contract to USDA Risk Management Agency for potential development of a program crop insurance program.

 

Corn & Sorghum Silage

 

There is not a set market for pricing on corn silage and forage sorghum for silage.  Silage production can be quite attractive relative to grain production.  Some preliminary 2022 silage prices in the Texas High Plains are ~$85/ton for corn silage and $65/ton for forage sorghum. These are the highest prices I have ever seen.  In irrigated systems these two silage crops will return more revenue per 1” of irrigation per acre than their grain counterpart.  This is attractive as length of growing season and production costs are lower for the silage than for the grain.

 

Peanuts

 

The U.S. had a large high quality peanut crop in 2021.  So, contractors and processors have been slow to issue bids for 2022.  They also may be waiting to see how much acreage might be diverted to cotton, corn, and grain sorghum.  The USDA Planting Intentions report to be issued on March 31, 2022, may influence decisions and prices once issued.

 

Peanut prices vary among Virginia, Runner, and Spanish; higher for Valencia.  Prices for 2022 are now establishing in the range of $675 to possibly $700/ton vs. $575 in 2021.  Spanish (shorter season, less irrigation) and Virginia are in similar 2022 range.  Valencia is shortest season, about one month less than Runner & Virginia and require less irrigation.  One Valencia quote for 2022 is $925/ton, up from $850/ton last year.

 

 

Summer Annual Forages & Alfalfa

 

Since there is not an established commodity price for these crops, they are harder to price.  In general sorghum/sudan prices are good.  Alfalfa at its different grades is not at top-dollar prices now.  One resource for understanding current hay prices for four Texas regions is the USDA Texas Direct Hay Report.  It is published every other week.  See https://www.ams.usda.gov/mnreports/ams_2707.pdf

 

An additional Row Crop Newsletter article was published in early March 2022 that discusses current Texas forage prices.

 

Dr. Calvin Trostle, Extension Agronomy, TAMU Dept. of Soil & Crop Sciences, Lubbock, 806-746-6101, ctrostle@ag.tamu.edu;

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