How can we gain a little perspective about this current cotton harvest season? Better yet, how do we make sense of these record yields in Texas, off-the-chart prices and near panic buying among global textile mills desperately looking for cotton? When all else fails, sometimes it helps to go back a year and see just how far we’ve come. And that is precisely what we might have to do now.
When we do turn back the clock to October of 2009, it’s hard to believe what has transpired in just 12 months. We obviously were still trying to recover from the economic recession that was affecting all sectors of the nation’s economy. Closer to home here in the Mid-South, we were in the midst of one of the worst weather events in history for cotton producers. It started raining in September and didn’t stop until late October.
The rains devastated what was shaping up as a spectacular cotton crop in Arkansas, Tennessee and Mississippi. Our friend Larry McClendon, a producer-ginner in Marianna, Ark., called it the most difficult moment in his 35-year career.
Anyone who has a sense of history knows that cotton has had its share of ups and down through the years. The crop has been declared dead numerous times...only to re-surface in time to make the critics eat a little crow. Nobody was eating crow in the fall of 2009. Farmers were just hoping to find some light at the end of the tunnel.
Then, as has been the case many times, some economic trends began to surface. Corn prices came back down to earth in January to the $3.75 level. Conversely, cotton futures started inching into the 70-cent range. Decisions for 2010 had to be made, and suddenly cotton acreage began to increase in nearly every region of the Belt. Everything began falling into place.
For the first time in several years, it made economic sense to plant cotton again and reduce corn acres.
Sometimes predictions fall flat on their face. But, in looking at the cover of the January 2010 issue of Cotton Farming, the caption turned out to be prophetic: “A Look Into The Future Reveals Cotton’s Comeback.” Call it whatever you want, but the economic experts knew what they were talking about. The perfect storm occurred. Cotton stocks were drawn down to extremely low levels. Crop forecasts in China, Pakistan and India were less than attractive, and global textile mills were scrambling for supplies.
Cotton futures are now above one dollar, and Texas is flirting with a 9 million bale crop. Was all of this the result of inevitable market forces? Maybe and maybe not. What we do know is that King Cotton has decided to return for an encore appearance.
And he might be staying around for awhile.
If you have comments, send them to: Editor, Cotton Farming Magazine, 5118 Park Ave., Suite 111, Memphis, Tenn., 38117. Or send e-mail to: email@example.com.
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