Making Every Cent Count
April 19, 2010 
A 2- to 6-cent over-the-loan premium for quality here … putting your cotton into a pool that pays 8, 10 and 12 cents more over there … then before you know it, you could be talking about a cash price of anywhere from 10 to as much as 18 cents over the loan value of cotton.
“Historically, that’s pretty good. If you can lock that in, you should,” says David Carter.
Carter, who farms 3,300 acres of cotton near Levelland, TX, pointed to 2008 as a prime example. That year, he was selling cotton as prices began to rise in the spring, figuring the price was passing points where he could make a profit with his fairly consistent 3-bale yields.
“What you’re doing is locking in a bottom,” he explains. “Waiting on the top can be a disaster.”
Many growers learned that the hard way. After topping out at over $1 per pound in March of ‘08, prices dropped to less than 50 cents in six months. The old trading adage is that bulls win, bears win and pigs get slaughtered ― mostly because pigs charge in without thinking or having a marketing plan.
In 2008, Carter put his cotton into a pool with Queensland Cotton. “Queensland came out with a 10-cents-over-loan pool and I sold all of mine that way,” he says. “You have to be more focused on marketing and find all the outlets you can.” Queensland Cotton is an Australian company with offices in Brazil and Fresno, CA. In 2007, Queensland was bought by Olam International, a Singapore-based company that deals in agricultural products and food ingredients.
“What initially got me in with Queensland Cotton was that they started a FiberMax-only pool,” Carter says. “They dropped that and opened it up, not necessarily to every cotton, but if you have a history of growing good-quality cotton, you’re okay. They’re probably looking for 55-cents-and-above quality, and we’re consistently doing that.”
And he has also been involved with picker-only pools. “In 2007, Queensland offered a picker-only pool, so a friend of mine and I leased a picker. We didn’t think there was any difference in that and the stripper cotton because we had perfect conditions,” he says. “Since I was at 58 cents and above, I had to go back to the drawing board on that one. The merchants may force us to pick rather than strip, but I strip everything now.
“In 2008, the fall just didn’t set up for pickers in West Texas. Our crop was late and the freeze was early; it just didn’t work out. Pickers just don’t do a good job when it’s 22 degrees.”
In 2009, a hot dry August and September cost Carter about a half-bale of his usual 3-bale average, but did surprisingly little to adversely affect the quality.
“We were consistently in the 56- to 57-cent range,” he says.
For this season, Carter has an 8-cent-over loan contract with Allenberg Cotton Co., is in a 10-cents over pool with Queensland, and in a new 12-cents over pool called “Venture Cotton Cooperative” through Noble Cotton of Singapore.
Noble has an office in Houston.
“I like pools,” Carter says.
Cotton It Is
Carter is a third-generation cotton farmer, and both sides of his family came to west Texas in the ‘20s and ‘30s to raise cotton. The Carter side of the family came from Oklahoma and the maternal side came from central Texas.
“Cotton is what we can grow here with our resources ― water, climate. That’s what we’re set up for,” he says. “Not only are we set up for it, it adds value to our gin and through warehousing.”
Carter is on the board of the United Cotton Growers Coop Gin in Levelland.
“We’re not like most coop gins,” he says. “We go out and look for different marketing options from merchants.”
And that’s how they found the opportunities with Queensland.
Carter has been a producer/delegate of the National Cotton Council for six years and is on the Plains Cotton Growers executive committee.
Last summer, former NCC chairman Larry McClendon, a producer and ginner from Marianna, AR, led a group to the High Plains looking for answers as to how the area has moved from producing some of the lowest-yielding, lowest-quality Upland cotton in the country, to the highest in both yield and quality … and also to tell some resistant Palmer amaranth horror stories.
“They scared us,” says Carter. “And we’ll have the same results if we’re not careful.
“They really wanted to know what we’re doing. We can show them, but what we do may not work in the Mid-South ― it’s just so different.”
Carter said what they did in west Texas was step back and question every aspect of what they were doing in growing cotton. No stone was left unturned.
One thing the Mid-South is blessed with is an abundance of water. West Texas isn’t but has been able to put all of the parts into the puzzle, including making the semi-arid conditions work for it, rather than against it.
With better water management, targeted germplasm and well-planned PGR programs, west Texas is hitting the homerun on irrigated cotton, and doing quite well when the weather cooperates on dryland.
Of Carter’s 3,300 acres, 2,500 is irrigated. He has 300 acres of drip and 2,200 under LEPA center-pivots.
“A lot of it has to do with the FiberMax varieties and the PGR program,” he says. “FiberMax is known for quality, but you still have to manage it, because there are other parts of the equation.”
In 2009, Carter had four FiberMax varieties ― FM 9063B2F, FM 9160B2F, FM 9180B2F, FM 9058F ― and two Stoneville varieties ― ST 4498B2RF and ST 5458B2RF.
This year he says he may increase on some varieties and decrease on others, but the mix will be basically the same.
Using a PGR is standard and applications start early. “We use PGRs because they work well from a maturity stand point, but we also think they help us with yields,” Carter explains. “We’ll start out with 2 ounces per acre ― usually it’s Pentia ― and then follow it with 6 to 8 ounces of whatever is the cheapest. I’ve used six different PGRs that are the same thing with different names.”
But there are two exceptions, says Carter: “If you get the first application timed just right, that may be enough to hold it. If you get some cool, wet weather in late July or August ― and we did ― you may have to come back with 16 to 24 ounces in one application to shut it down.”
Say No to the R-word
Carter says they’ve always had careless weed, as Palmer amaranth is sometimes known as on the High Plains, but they’ve never had to use the R-word.
“We’ve never seen any signs,” he says. “We’ve been using a yellow pre-plant and Roundup and it’s been working beautifully. Some people leave off a yellow completely and some lower the rates. Those are things you can’t do if there’s a chance of resistance. I use the highest rates I can, and I don’t think that’s too much.”
Carter doesn’t post-direct with anything other than Roundup and doesn’t layby. “But we may look at layby again,” he says. “It would give us a chance to rotate chemistry on Palmer amaranth.”
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