What is your reaction to published reports speculating about possible cotton prices at $1.25 in January?
It’s hard to tell where cotton prices will be in January; however, higher commodity prices in 2011 could potentially bring a renewed level of confidence and optimism to the farm. While factors such as weed resistance, tightening credit and unpredictable weather will also impact the decision-making process, attractive cotton prices will certainly support growers’ flexibility. Regardless of where cotton prices land, Syngenta is committed to the industry and the long-term success of our cotton producers.
Colorado City, Texas
My reaction to these kinds of reports is pretty simple. I’ve never sold a pound of cotton for a dollar, and even though I would love to sell at that price, I don’t anticipate selling my cotton for a dollar this year. I am just hoping that we can hold world prices consistently at 80 or 90 cents. Sure, I would love to see dollar cotton, but the realist in me says if you are offered 80-cent cotton, go ahead and book it.
I believe these higher prices create a lot of optimism for cotton farmers. From my perspective as an engineer, I am thinking about how farmers will invest more in harvesting equipment for the future. I think that will be one indicator of a long-term commitment to continue to produce cotton. We have needed this optimism for a long time, and I am glad to see it happening. From everything I have heard, this won’t be a one year phenomenon for higher prices. It’s a nice situation for producers to know that cotton, soybean and corn prices are all good right now. Anything they plant can make money for them.
To be completely honest with you, I don’t think the world can support a cotton price that high. We are definitely charting new ground if this actually were to happen. It’s pretty unbelievable when you think about it. I do know that wherever the price winds up, producers need to start preparing for next year and making smart financial decisions with regard to all of their inputs. I am the kind of farmer who has never given up on cotton. No matter how tempting the other crops were, I stayed with cotton, and I’m glad I did. I feel good about the crop we’re harvesting this year.
No one really knows where the price is headed. You have to understand that there is a window for pricing that everybody has to work within. When price levels reach the stratosphere, the downside is more difficult than the good that happened in the upside. In my opinion, an 80- to 90-cent range is pretty good. If prices went much higher, we would probably see acreage increase worldwide, but then prices would go back down again.
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