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Marketing

Time And Money Affect Ag Insurance Uptake

Farmers use crop insurance to protect themselves against risk — primarily against crop failure and low market prices. In the United States, the federal crop insurance program has grown steadily since the mid-1990s and become the single largest individual program providing support to farmers under the 2014 Farm Act. Growth in crop insurance programs — both in the United States and in developing countries — appears to be driven in part by premium subsidies from governments. Unlike previous research on the topic, which emphasizes a farmer’s attitude toward risk as the primary driver of insurance uptake, this report analyzes the relationship between wealth, savings and insurance over time to identify alternative approaches to managing farm risk. What Did The Study Find? When farm households consider multiple growing seasons, insurance and savings are substitutes. Demand for insurance will fall as the interest rate on savings rises; similarly, farmers will save more and insure less as insurance premium rates increase. The exception is among farm households that are less wealthy; when wealth is low to start, additional savings complements insurance, allowing households to be able to afford to pay an insurance premium when they do not yet have enough savings to completely self-insure. Demand for crop insurance, when examined over multiple years, is primarily driven by the farmer’s financial wealth rather than the farmer’s attitude toward risk. Both uptake of insurance and choice of coverage levels are heavily determined by the producer’s income and savings. Crop insurance is in low demand at both Read More »

A Necessary Assessment

Although export of raw cotton has become essential to U.S. cotton producers’ economic well-being, the National Cotton Council continues its longstanding work for our domestic textile industry. How about assistance in the legislative arena? n A major effort is the NCC’s work to maintain the highly successful “Economic Assistance to Users of Upland Cotton” program first introduced in 2008 farm law and reauthorized in the 2014 bill. This program makes a payment of 3 cents per pound to U.S. textile manufacturers for all upland cotton consumed. Payments must be used for specific purposes such as acquisition, construction, installation, modernization, development, conversion, or expansion of land, plant buildings, equipment, facilities or machinery. More recently, the NCC has been working with the Washington D.C.-based National Council of Textile Organizations (NCTO) and key lawmakers to make sure the Berry Amendment is not weakened in the FY16 National Defense Authorization Act. That Amendment requires the Department of Defense and the Department of Homeland Security to purchase textiles and apparel made with 100 percent U.S. fiber and labor. Likewise, the NCC, NCTO and others have conveyed to lawmakers the critical need for Export-Import Bank Reauthorization. The Ex-Im Bank provides important financing for the U.S. textile industry and its ability to export products. Read More »

Bogue Chitto Gin

New Mississippi Facility Exceeds Wildest Dreams By Carroll Smith Editor Tucked away in Noxubee County, Miss., about 1½ miles down Deerbrook Road, Bogue Chitto Gin Inc. is an impressive testimony to area producers’ faith in cotton. The 25 stockholders settled on the name Bogue Chitto (“big water”) as a nod to the Choctaw Indian culture that is of historical significance ... Read More »

Building a Brand

Cotton Council International (CCI) the National Cotton Council’s (NCC) export promotions arm, is vigorously promoting U.S. cotton worldwide among yarn spinners, fabric/garment manufacturers, brands/retailers and consumers. How is CCI executing its strategy? Working from 20 offices covering more than 50 countries in Asia, Europe, Africa, and Central and South America, CCI is striving to make U.S. cotton the preferred fiber ... Read More »

Cotton Market Outlook

After rallying to the upper 70 cents per pound range during the month of July, new crop cotton futures prices appear to be working their way back down. For much of 2016, new crop cotton futures prices seemed to be stuck in an upper 50 cents to low 60 cents per pound trading range. All of the fundamental supply and demand news pointed to larger acreage and larger production in 2016. With no significant signs of improved domestic or export demand, the potential for a large 2016 crop weighed heavily on the market.However, as the summer progressed, the development of hot, dry conditions in Texas and parts of Georgia along with dry conditions in India began to foster concerns of lower cotton supplies. This introduced a considerable amount of risk premium in the markets and helped support prices. Speculative interests took this momentum and continued to push prices higher by going from a net short position (selling more contracts then purchasing) in early 2016 to the highest net long position (purchasing more contracts then selling) in more than two years. However, this has brought prices to levels that are not fully supported by the underlying supply and demand fundamentals. Read More »

Three New Initiatives Move Consumers To Purchase Cotton

Cotton Incorporated has a renewed, refreshed approach to its goal of increasing consumer demand for cotton. Last year, the organization launched “Cotton. It’s Your Favorite for a Reason” television advertising campaign and is now taking it a step further by giving consumers every opportunity to shop for their favorite fabric. Over the summer, Cotton Incorporated’s Consumer Marketing team set in ... Read More »

Special Interest Projects Funded

The Cotton Research and Promotion Program continues to support Western cotton growers with research programs specifically tailored to the region through Cotton Incorporated’s State Support Program. This program allows regional cotton organizations to have direct input into the funding of projects within each state. While Cotton Incorporated is already on the ground throughout the Cotton Belt with an understanding of ... Read More »