Project Summaries

01-994  Project Manager: J. M. Reeves


Lawrence Falconer, Texas AgriLife Extension Service

This study was a continuation of a project designed to develop and maintain a windows-based computer program to support cotton producers in making well founded decisions with respect to economic and financial choices that occur during the entire production cycle. This study also provided maintenance for windows-based computer programs to support calculations of the value of cotton quality based on CCC loan values. This study improved and updated the programs over the 2012 time period. Also, added in 2012, was an ELS loan valuation model as well.

Yield and quality together form the basis for calculating the value of harvested cotton. Calculating the value of cotton harvested in applied research and result demonstration work is crucial in determining the economic effectiveness of the specific treatment or variety being examined. While yield calculations in result demonstration or applied research work can be somewhat complex due to various row spacing, plot lengths, etc., the determination of the applicable price to use for the quality of cotton produced is a more tedious process.

In many cases, the CCC loan value for the quality of cotton produced serves as a conservative estimate for price to include in the calculation of cotton value. The CCC loan value is based on quality measures provided by the grading system of the USDA's Agricultural Marketing Service (AMS) Cotton Classing Office. AMS provides estimates of the cotton's color grade, length, strength, micronaire, uniformity, leaf, and extraneous matter. AMS develops schedules of premiums and discounts for these measures annually based on market conditions. The appropriate premiums and discounts are applied to the CCC base loan rate to determine the value of the cotton if entered in the CCC non-recourse loan program.

The calculation of the CCC loan rate net of the appropriate premiums and discounts can be time consuming for the applied researcher or person carrying out the result demonstration, particularly if a large number of treatments or varieties are being examined. Because of this, and producer interest in calculating net loan values on their own cotton, the Cotton Loan Valuation Program was developed, and is updated on an annual basis and is available on the Internet at

The Cotton Loan Valuation Program is a Windows-based tool that provides the capability to calculate CCC loan premiums and discounts on cotton based on HVI classing data for the current crop year. This tool provides the user an efficient method to evaluate changes in cultural practices with respect not only to yield but also cotton quality. This project also provided producers, cotton industry input suppliers, applied researchers, and other interested parties with updated software to calculate the value of cotton based on current marketing year CCC loan premiums and discounts. The Cotton Loan program is easy to use and thousands of copies are distributed annually. Product awareness was increased by another presentation of the updated modules at Southern Extension Farm Management Committee Meetings. This presentation increased demand for the Cotton Loan Valuation Program. The program was subsequently provided to interested parties including private industry representatives and applied research personnel in Texas, North Carolina, Georgia, Louisiana, Mississippi, and Cooperative Extension Service personnel.

The Cotton Loan Valuation program was substantially revised with the inclusion of the 2012 crop loan premium and discount tables along with streamlining the data entry module. Work is ongoing to develop on-line help, but the user's manual for the Cotton Loan Valuation program is available along with the program downloads. The Cotton Loan Valuation models (Upland and ELS) are available on


Project Year: 2012

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