Southerners look at the future for cotton
Gary Adams is chief economist for the National Cotton Council (NCC), based just outside Memphis, Tenn.
> Cotton Can Still Rebound.
Some market analysts still feel reasonably bullish when they look longer term, to the latter part of 2010. The U.S. is probably going to draw down cotton stocks a little further than originally anticipated, primarily because we're continuing to see a good export pace. USDA reports we had about 6 million bales of stocks at the end of the 2008 marketing year, July 31. We began the year with 10 million. Given the 9 million acres we planted and some problems with weather, we think we're going to draw down stocks further through the 2009/10 marketing year and come in with 4 to 5 million bales, essentially half the total of a year ago. That changes the tone of the market to some degree. If we get a reduction in stocks on a global basis, which seems possible, it paints a scenario that's more supportive of higher prices.
Larry McClendon, former NCC chair, grows cotton and grain and partners in a gin at Marianna, Ark.
> It Depends on Grain Markets.
The cotton acreage reduction has had a devastating effect on the mid-South. It's been very difficult, and the further south you go in the Delta, the worse it gets. High grain prices took cotton out of production. Lower grain prices will put cotton back in production. We're on the cusp of seeing significantly lower grain prices.
I don't think it'll be a short-term thing. There's some real bloodletting going on out here in the corn business now. We're going to think Grant coming to Vicksburg was a walk in the park if corn stays where it is now. What we need is an alignment of cotton price to grain prices. We need some improvement in cotton prices and some retraction in grain prices, and I think we're seeing that right now. What we need is not $1/lb. cotton prices, but reasonable prices and good yields.
Bobby Greene is president and CEO of Servico Gin, Courtland, Ala., and former NCC chair
> Tough Times for Ginners.
I'm looking at the smallest cotton acreage in the Tennessee Valley in 25 years. Next year will be the really tough year for gins because we won't have volume from 2009 production to generate income in 2010. We will manage costs and hope plantings increase in 2010, which will occur, provided we see more traditional price relationships among crops. I expect grain and cotton will be rotated regularly, which will have a positive impact on cotton yields, as will other technological advances. Though I don't expect to see cotton acreage at 2006 levels again, yield increases will offset some of the long-term acreage loss. Our gin has implemented several process technologies that improve our competitiveness and our customers' cotton production income, but these things alone are not sufficient to increase plantings.
Andrew Duff is Monsanto's Deltapine marketing manager, located in Memphis, Tenn.
> Shift from the Mid-South.
As a cottonseed business, we look at how we can manage our resources to be the most effective on those acres growers are planting. More than 50% of all U.S. cotton acres now are in Texas, so we're increasing our investment in the Lubbock area to create a megasite where we're going to be able to combine new breeding capabilities with new biotechnology capabilities. In the mid-South, prices are driving soybeans fast. We think farmers may be better off economically with soybeans and irrigation than some other cropping options. You can put soybeans on some of this cotton land and derive a yield comparable to central Illinois. The Delta has great yield potential; this soil washed down here from Iowa and Illinois. I think grains are here to stay in the Delta. Look at the number of grain bins that have gone in.
Top Producer, September 2009