Based on the data available, Lubbock-based Plains Cotton Growers anticipates USDA RMA to announce a 2021 harvest price of $1.09 per pound applicable to Upland cotton policies sold in February 28 and March 15 sales closing date (SCD) counties.
The October 29 settlement price for the December 2021 Upland cotton futures contract was the final piece of information needed for the USDA Risk Management Agency to calculate the 2021 harvest price for Upland cotton insurance policies sold in counties with a February 28 or March 15 SCD.
October 29 is the last trading day of the month for the December 2021 ICE Cotton futures contract and also the last day of the harvest price discovery period for the February 28 and March 15 SCD counties mentioned previously. According to the RMA Commodity Exchange Price Provisions for Cotton, the harvest price will be released no more than three business days following the end of the harvest price discovery period.
A projected Upland cotton insurance price of $0.80 per pound was announced on February 14, 2021 for counties with a February 28 SCD. The projected Upland cotton insurance price for March 15 SCD counties is $0.83 per pound and was announced on February 28, 2021.
The harvest price is used to reset expected revenue amounts and, if necessary, calculate final loss values for producers who purchased a Revenue plan of insurance and suffered insurable losses during the season.
The Upland cotton harvest price for February 28 and March 15 SCD counties is established during the month of October and is the average of the daily settlement price for the applicable December ICE Cotton futures contract.
The harvest price for Upland cotton Revenue plan policies sold in counties with a January 31 SCD was announced at $0.94 per pound and established using the daily settlement prices for the December ICE Cotton futures contract during the month of September 2021.
