Keeping Cotton In The Mix
June 3, 2009 Much has been written recently about the challenges facing the U.S. economy from rising energy costs and now a financial sector in total disarray. What hasn’t been as widely publicized to the general public is the multi-year battle those of us involved in production agriculture have been fighting against an almost identical set of challenges.
Rising costs for fuel, fertilizer, seed and seed-borne technology have been strongly felt by cotton producers for quite a while. In many areas of the Cotton Belt this trend, plus record high prices for alternative crops such as corn, grain sorghum, wheat and soybeans have severely reduced cotton plantings, concentrated our nation’s cotton production, and are threatening the financial viability of the underlying infrastructure of our industry.
Cotton’s disadvantage when comparing costs versus returns with other crops has resulted in the significant move away from cotton and all but eliminated it from the mix in many operations. Other crops have certainly seen input costs increase, but cotton just hasn’t had the benefit of record high prices to mask their devastating impact.
Determining cause and effect in the current economy and in commodity markets has been nearly impossible over the past few months. About the only thing we know is that the turmoil inside our financial sector and commodity markets has spread like wildfire throughout every part of the U.S. economy and the world. One notable effect of this turmoil has been the recent change in grain and soybean prices levels, which are still fairly strong, but nowhere near the levels they were earlier this year.
In addition, the dramatic drop in the price of oil and natural gas, could return some balance to the cost-return analysis that so easily favored other crops not long ago. Without a significant upward movement in cotton prices, these changes aren’t likely to shift the numbers enough to make cotton an automatic choice in 2009. They could, however, make enough difference to make cotton a viable alternative for many growers, especially those whose primary input costs are energy related.
The key to making the best possible cropping decision now that cotton has a chance to compete for acres in 2009 is information and making sure that growers explore every possible option to maximize their return for a dollar invested.
Agriculture has always been a rapidly changing industry. Cotton is the same and every year improvements are made in technology and management techniques that can help us be more efficient.
A good place for growers to get this information and start giving cotton another look is at this year’s Beltwide Cotton Conferences in San Antonio, January 5-8.
San Antonio’s central location and easy access make it a popular stop on the Beltwide circuit and should make the decision to attend this year’s conference even easier. I encourage everyone to take advantage of this tremendous opportunity.
The Beltwide simplifies the job of keeping up with trends and technology by bringing the sources of this valuable information together in an easily accessible format, focused on delivering information to the cotton grower.
It will not be an easy exercise for growers to decide what to plant in 2009, but the knowledge available at Beltwide should help in making that decision.
The Beltwide is the perfect place to look for ways to cut costs, save money and add the efficiencies to make cotton pay in a crop mix. It is also a chance for growers to catch up on the latest technology, share production tips and learn new ways to maximize returns. It provides tremendous bang for your production dollar, and is one of the best investments a cotton producer can make in the success of their operation.
The simple fact is that we are all looking for the same thing – a way to survive in a highly volatile production and marketing environment.
One of the greatest strengths of the U.S. cotton industry is a broad array of production and research resources. Taking advantage of the opportunity to engage those resources to our benefit is critical as we head into an uncertain future.
There are no easy answers, but our industry’s survival depends on making sure every dollar we spend on cotton production inputs provides a maximum return on our investment. Information, innovation and solid management will be the key to our collective success in 2009 and beyond.
Don’t let this year’s opportunity pass you by.
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