A Taste of Things Domestic
May 11, 2009 The cover story this month is on John Dunavant, First Vice President of the American Cotton Shippers Association. ACSA’s 85th Annual Convention will be held May 27-29 in Chicago.
The story has more of an international flavor to it because what American cotton shippers do is ship 80% of American cotton internationally.
As Executive Vice President of Domestic Sales and Southeast Buying at Dunavant Enterprises here in Memphis, John has a unique perspective ― not to mention a surname steeped in cotton heritage ― on both the domestic and international state of the cotton business. Let’s take a glance at what he thinks of things domestic.
Is there anyone in the cotton business who would not ask this question first: “When is this going to turn around?” “This” being all inclusive.
“I think we’ve reached the bottom on acreage in the U.S., but not in the world,” he says. “The world has still got to decrease cotton acreage. We’ve cut acreage by over 30%. I think you will start to see the world’s acreage go more into food crops while U.S. cotton acreage will stabilize and potentially grow.
But it will take more than just a sizeable drop in cotton stocks to drive cotton prices back in line relative to other commodity prices, particularly corn and soybeans. That painful ingrown toenail is the economy.
“I don’t think we’ve hit bottom, but we’re real close,” Dunavant says. “I think by the first quarter of 2010, the economy will be growing some legs and they’ll start to move us in the right direction. But my crystal ball is not good. I thought we’d start to see that this summer and I’m having to revise that.”
Well, no one else’s crystal ball has been that good, either. Recovery has been a moving target … dangling the carrot in front of the mule. But we may be closing the gap on the target and the mule may finally taste the carrot.
“We’ve had the decreases in acreage and the economy will come out of the recession,” says Dunavant. “We are going to continue to see improvement in the standard of living in both China and India and those consumers are going to want to buy cotton products. I have to be friendly to cotton over he next two years.
“I’m excited about the future of cotton,” he continues. “Everything has to go through down cycles.”
GET THE NEWSLETTER TODAY!
