Getting Well … But With Some Nasty Medicine

Back in the 1700s and 1800s, armadas with hundreds of warships from Great Britain, France and Spain sailed around the world raining broadsides on each other. I guess the concept of the enemy of my enemy is my friend didn’t apply then.

One of the ways the British Royal Navy kept crews in check — and the most fearsome — was called “flogging around the fleet.” The instrument of torture was a cat o’nine tales — a multi-tailed whip with each cord tied with three knots and metal inserted into the knots. The unlucky soul on the receiving end was towed from ship to ship to be flogged in front of each. By the time the end was reached, a corpse was being flogged.

The Cotton Grower Acreage Survey, was taken in November and released in our January issue at the Beltwide Cotton Conferences in San Antonio. Our survey results were that there would be 7.9 million acres of Upland cotton planted in ’09.

After some conversations at Beltwide, I came home a little more bullish on cotton acreage. The feeling was that if current market fundamentals continued, we had a shot 8.25 to 8.5 million acres. They did not continue.

Starting this marketing year (and I’ll use rounded figures here), USDA projected U.S. carryover would be cut nearly in half from 9.5 million bales to just less that 5 million. Later, USDA adjusted the carryover number upward to around 6 million bales. In its February report, USDA projected carryover at 7.7 million bales. Then the world economy collapsed.

Bearish news on top of bearish news.

In mid-January at the National Cotton Council’s Annual Meeting in Washington, DC, NCC projected 7.97 million acres of Upland cotton would be planted this year. Us — 7.90; NCC — 7.97. Eerily close. Normally, our acreage number being that close to NCC’s would be ego building. Not this time.

In the face of the worrisome economic slowdown, which has directly affected textile demand, the cotton industry has the unenviable task of finding ways to reduce both U.S. and world stocks. Less cotton acreage is hard to swallow, but it’s a start.

When I was little, my Mama and Daddy would shove nasty-tasting medicine down my throat when I was sick. But as vile as the medicine was, I had to take it to get well. And that’s exactly what the cotton industry has to do to get the market headed north. Take the medicine; get well.

Tell me what the weather is going to be in mid-March and the price of cotton, corn and soybeans, and I’ll take another stab at acreage … as long as being wrong means taking nasty medicine but not flogged around the fleet.