The authors are Post Doctoral Research Associate, Professor, and Professor, respectively, Department of Agricultural and Applied Economics, Texas Tech University. The authors acknowledge Plains Cotton Cooperative Association and DTN Cotnet for cooperation in obtaining the data.

This research is supported by Cotton Incorporated and the Texas State Support Committee.

Abstract

The analysis of the West Texas and East Texas/Oklahoma spot market using the Daily Price Estimation System (DPES) indicated an overall improvement in quality in the 2005/06 marketing year relative to the 2004/05 marketing year. The results also showed an increase in price in 2005/06 compared to 2004/05, though it remained below its 2003/04 level. The combined total bales and total sales in the two regions were higher in 2005/06, with increased sales in both the West Texas and East Texas/Oklahoma regions. For the 2005/06 marketing year, the results indicated higher premiums for low leaf grade, higher staple length, and lower first digit color grade. Price discounts in 2005/06 for lower staple length and higher than base quality for first digit color grade remained unchanged. Discounts for leaf and micronaire increased compared to the 2004/05 levels, while discounts for strength, bark, and first digit of the color grade decreased.



Bark

Discounts for level 1 bark in the 2005/06 marketing year generally fluctuated between 100 and 300 points/lb. (Figure 14). Compared to the previous marketing year, discount for level 1 bark in 2005/06 was, on average, 150 points lower (Figure 15).