As cotton farmers in the United States, you are blessed with wonderful resources and opportunities. You have great land, wide open spaces, awesome resources including access to financing, high tech seed and fertilizer, machine picking, bale-by- bale USDA classification, covered warehouses and the best infrastructure for moving your product in the history of the world. These things may seem mundane to you, but most cotton farmers in the world don’t have any of those things, and maybe 10 percent of farms in the world have all of them.
Think about that for a minute. You are competing with people who have only a fraction of the advantages you have: people who measure the width of their rows with a string, people who plow with an ox, people who harvest their cotton by hand, people who are at the mercy of their governments because their governments are the only buyer for their crops. All in all, despite the hardships that U.S. farmers face, I doubt there are many of you who would voluntarily trade places with your counterparts in other countries.
With all of these advantages, it is no wonder that U.S. cotton trades at a premium to other comparable growths in the world. Your cotton has very little if any contamination because of your harvesting practices; it has even running quality because of the bale-by-bale HVI class; it has almost no country damage issues because it is (almost) all stored indoors; it is almost always delivered on time because of the U.S. infrastructure and the reliability of American shippers, and it can be delivered year-round, again because of our infrastructure, storage facilities and the financial strength of U.S. cotton merchants.
On any given day, a textile mill in Thailand, Indonesia, Japan or another importing country would likely buy American cotton ahead of similarly priced fiber from other exporting countries around the world. So, my advice to American cotton farmers is to keep up the good work, but don’t do anything to subtract from the value of your product.
If your cotton trades at a premium because it has no country damage, why would you choose to store it outdoors? If your cotton trades at a premium because of its even running color and accurate class, why would you spray water on it while it is being ginned? This practice can cause mildew in a worst-case scenario, but even in a best-case scenario will lead to discoloration of the fiber 90-120 days down the line when the cotton is likely to be consumed. If your cotton trades at a premium because it has hardly any short fiber content, why would you add waste back into a bale during the ginning process? If you get a premium for on-time shipment, why would you put your cotton into a warehouse that won’t ship in a timely manner?
We live in a world where almost all buyers are delaying their buying decisions as long as possible because of uncertainties about the yarn and fabric business. Mills (and retailers) around the world have reduced inventories to levels unheard of even a year ago. When all of our inquiries are for prompt shipment, it is frustrating to deal with warehouses who give us their “earliest possible” loadout dates 60-70 days out. This nullifies what was once one of the greatest advantages of U.S. cotton.
Most warehouses are farmer-owned, so you have a say in how they are managed. You should insist on efficiency when it is not only possible but also one of the few things that separates you from your competitors.
I am proud to be a cotton merchant, and think that by helping our customers (both farmers and textile mills) manage risk and inventories, Cargill adds value to the cotton we merchandise. We are offering innovative products and services to our customers that were never even considered in years past. But all the value we add can be undone if we fail to deliver on what we promise.
One default or bad shipment can damage our reputation. Likewise, if we, as an industry, don’t act in concert to preserve the advantages we have, then we are no better than any cheaper fiber out there and don’t deserve the premium that the market has awarded us.
Reputations, as my dad used to say, take years to build but only hours to ruin. We’re all in this together, so let’s make good decisions about our common futures.
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Hopie Brooks is Senior Merchant and Director of Marketing for Cargill Cotton in Memphis, Tenn. Cargill is one of the largest cotton merchants in the world with offices in India, China, Brazil, Europe and the United States, as well as being the largest ginner in southern Africa, with gins in Zimbabwe, Malawi and Zambia. Contact Brooks at Hope_Brooks@cargill.com. For more information on Cargill’s operation, go to the company’s Web site at www.cargill.com.