From Cotton Grower Magazine – February 2015
Cotton Grower, IntercontinentalExchange and the Certified FiberMax program of Bayer CropScience are pleased to honor Blake Lauritsen of El Campo, TX, as the 2014 Marketer of the Year.
“For 24 years, this award has been given to U.S. cotton growers who demonstrate excellence in a marketing program,” explained Dr. O. A. Cleveland, professor emeritus of agricultural economics at Mississippi State University, who makes the annual presentation.
The award is presented each year during the National Cotton Council’s Beltwide Cotton Conferences, held this year in San Antonio.
But then, he seems to be doing just fine on his own.
His attention to commodity markets, the global cotton industry, good business sense – and a bit of luck, he’ll admit – allowed Lauritsen to make the most out of marketing his 2014 cotton crop. It also earned him the 2014 Marketer of the Year award, presented during the recent Beltwide Cotton Conferences in San Antonio.
Lauritsen is a fourth-generation farmer, working land that’s been in his family since the late 1800s. Located in the Danevang area, a small Danish community near El Campo, TX, the farm now covers a total of 3,200 acres – almost solely planted to cotton – which he farms with a cousin and one employee.
“Like my dad, I basically started farming when I was a kid,” said Lauritsen. “I remember tromping cotton trailers, but really started helping out driving tractors and doing other things when I was nine years old.”
He’s been “officially” farming since 2004, and assumed full responsibility when his father retired after the 2012 crop. Marketing came as part of that responsibility.
So what’s his secret? Lauritsen swears it’s nothing more than paying attention to the markets, understanding their cycles, and trusting your gut.
“I review the market reports we get from Jeremy Speis and the staff at Calcot,” he explained. “Then, using historical logic – and knowing that high prices can’t stay around forever – I attempt to find myself a spot where I believe I can be profitable and be happy with the price.
“Depending on the reports, I’ll determine if I want to sell or hold out. Sometimes, I should have sold when I held out,” he laughed. “And vice versa.”
Lauritsen admits to watching all commodity markets closely, with a keen eye on his prime bellwether market – Midwest corn.
“Everything seems to follow corn,” he said. “When I starting hearing talk about corn prices backing down, I knew cotton was going to eventually follow. So I felt like that would be a good time to sell some cotton I was holding. I was fortunate enough to hit a good market point after harvest.”
Lauritsen diversifies his marketing efforts to help spread his risk and potential for success. He contracted part of his 2014 crop early while cotton was in the 80 to 84 cent range, and contracted a bit more after planting. Then, cotton followed corn downward. So he decided to hold the rest of his crop and wait for something to happen.
“The price really wasn’t moving up or down. It was staying within a five cent window,” he recalled. “I didn’t feel like I had anything to lose, so I just held out. We pretty much stayed sideways all the way through. After harvest, I fixed the last of the crop in the 65 cent range.
“That was as good as it was going to get.”
As a Calcot member, Lauritsen does utilize the cooperative’s pool program from time to time, in addition to his own self-marketing efforts. He generally focuses on a mix of personal sales and the pool, but admits the pool may be the better option in a down market.
“Things are changing so fast in this market, especially with it being as volatile as it’s been since cotton fell from $2.00,” he said. “Each year is different.”
That’s experience talking. He’s learned that trends can be helpful, but often don’t mean much.