COTTON – CHARTING NEW WATERS

A Sleeping Giant Has Awakened

The operative words recently used to describe today’s environment for U.S. cotton have been...volatile, unpredictable, historic, mind-boggling and maybe even breathtaking.

No matter what adjectives we can conjure, this is the perfect storm for supply and demand. There simply isn’t enough of this commodity in the world right now. Weather problems in China and other cotton-producing countries caused part of the problem.

Then along came an economic recession. That scenario was followed by U.S. producers jumping on the corn and soybean bandwagon to take advantage of skyrocketing prices for those two commodities.

Cotton, meanwhile, appeared to have been left in the dust.

Everything started changing in the fall of 2010 when the world’s mills awoke from their economic recession and started scrambling to find available cotton supplies.

The price runup began, and now the industry truly finds itself confronted by “uncharted waters.”

Where will the dizzying ride end? Not even the industry’s best economists are sure about that. The most conservative economists say this trend could last for at least a couple of years.

How can a producer possibly make the right decision from a production and marketing standpoint? Cotton Farming decided to ask four respected producers from across the Belt to offer their own analysis.

When it comes to understanding the cotton market, you can’t find a more experienced group than Bob McLendon, Kenneth Hood, Bill Lovelady and Dennis Palmer.

These producers have held leadership positions within the industry and know what it takes to survive during turbulent environments.

In the following pages, they offer some interesting perspectives on what kind of road the industry is traveling right now.

Look for their reports on pages 14, 16, 20 and 22.