Friday, April 19, 2024

Optimism Was Observed At Mid-South Farm/Gin Show

Tommy Horton
By Tommy Horton, Editor

If you thought you’d find some gloom and doom at the Mid-South Farm & Gin Show in Memphis, you were probably shocked. Producers, ginners and industry representatives have chosen to take the high road in dealing with low cotton prices. Yes, this Beltwide trend is a major concern – especially in the Mid-South where acreage shifts are more common. And, yes, acres will be reduced in this five-state area to one of the lowest levels we’ve seen in years…1.1 million acres. That’s a 26 percent drop compared to 2014.

What we saw and heard wasn’t a doomsday attitude. Far from it. What we observed were glimmers of hope as prices creeped up into the mid-60 cent range. Industry experts such as Memphis merchant Joe Nicosia hit on some of the familiar themes in his presentation at the Ag Update. He said China controls much of what might happen in the next few years in terms of US cotton exports. But he said producers can deal with this environment if they embrace cotton as an important crop, maximize yields and hope that the industry can recapture demand. This is exactly what NCC Executive Vice President Gary Adams said last month at the NCC Annual Meeting. Many producers will stay with cotton, but they also will move a lot of cotton into soybean acres because of more attractive prices.

Even when Nicosia was questioned about sticking with cotton, he re-emphasized that opportunities still exist for this crop, and that a nice price surge could be a signal of things to come.

Perhaps the most surprising comment came from market analyst Richard Brock who offers a yearly update on all crops at this show. Brock saved cotton for the last topic in his remarks. And everyone in the room became extremely quiet when he said his recommendation is to plant cotton in 2015.

“I am a contrarian,” said Brock. “I don’t always go along with the crowd. I have always liked cotton, and I see opportunities as these prices start to improve. Rather than moan and groan, I encourage producers to try to take advantage of the situation.”

Even when I walked around the exhibit hall and met with producers, ginners and various company reps, I found an attitude that reflected some cautious optimism. Nobody was ready to give up. But rather than flatly saying that they would abandon cotton, many producers simply hedged their bets – no pun intended.

Maybe other regions of the Belt are more predictable when it comes to cotton planted acreage in 2015. Farmers in the Mid-South will wait as long as they can before making their decision this spring. Many are hoping that the price can begin to inch toward 70 cents and beyond. Add on some loan premiums, and we might see a slightly different picture in this region.



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