The Winds Are Blowing – But In What Direction?

The theme of this month’s issue is “Winds of Change” and, quiet frankly, there are so many things that changed over the past season, so many important issues that remain in flux and so much uncertainty, I don’t know where to start. But here goes.

• The weather. Could 2005 and 2006 have been more different for much of the Cotton Belt? What Hurricane Katrina didn’t get, Hurricane Rita did in ‘05. How often did we say that? This season, major sections of the Mid-South and the High Plains of Texas were desert-sand dry.
• Fuel prices. Gasoline prices are about $1 less right now than they were a year ago, but the price explosion after the hurricanes dramatically impacted the already razor-thin profit margin/bottom line. Increases in natural gas prices drove ginning and fertilizer costs through the roof.
• The mid-term elections. I was not shocked at all that the Republicans lost control of the House of Representatives. But I was mildly surprised that the Democrat tide swept the Republicans out of the Senate, too. What does that do to the upcoming Farm Bill? So far, I have to like what the Democrats are saying: We will have a new Farm Bill — not an extension — that will not have significant changes. Will the Republicans agree? Who knows, but they have essentially said the same thing.
• Doha and West Africa. I see the collapse of the WTO Doha Round as positive for U.S. cotton. The West Africans have been weeping, wailing and gnashing their teeth while accusing U.S. agriculture — particularly U.S. cotton farmers — of keeping them in poverty and depressing world cotton prices. And they may have somewhat of a point, but I can’t see us giving up more (we’ve already dumped Step 2) when foreign markets are not open to American goods and services. I’m all for free trade, but what is “free trade” for them must also be “free trade” for us. Quid pro quo or nothing.
• Billy Dunavant and the National Cotton Council. On October 9th, Dunavant Enterprises — the world’s largest cotton merchant — chose to resign membership in the National Cotton Council after 38 years (1968-2006). Patriarch Billy Dunavant, Jr. believes the NCC has turned its back on the interests of the independent cotton merchants and warehousemen. Dunavant granted the editors of Cotton Grower Magazine a wide-ranging interview on November 9th and we will be reporting on that in its entirety in future issues. Dunavant was candid and forthcoming, and I got the distinct impression that he personally bears no ill will toward the NCC. But when Dunavant bolted, published reports say he took $200,000-$250,000 in NCC dues with him. Stay tuned for the rest of the story.