Cotton sets a record
By James Faucett l Art by Angelina Bellebuono
Years ago, the late Rutledge farmer Walter Bonny Shepherd made a prediction – that his son would see yields of more than three bales of cotton per acre.
Mark Shepherd didn’t see how it could get better than the two-and-a-half the family saw in 1982.
"But it did," he said last month.
This season, some of his fields have reached that milestone in what is turning out to be a boom year for cotton.
According to the USDA, 8 million bales have been ginned in the U.S. this season through November 1, compared to 2.3 million for the same period last year. In Georgia, 806,000 have been ginned, versus 209,000 last year.
The USDA projects that the U.S. will produce 18.4 million bales for 2010, versus 12.2 million last year. Georgia is expected to produce 2.2 million bales, compared to 1.9 million for 2009.
And prices are at historic levels.
This fall, cotton futures have reached about $1.50 for a pound, according to Don Shurley, a cotton economist with the University of Georgia. Cotton closed Nov. 15 at just under $1.40.
And it appeared to have hit an all-time high of $1.5723 in intra-day trading on Nov. 10, according to Lee Underwood of the Intercontinental Exchange (ICE), though the price ultimately closed lower for the day.
“These are the highest prices since we started keeping records,” Shurley said, adding that they go back to 1876.
Richey Seaton of the Georgia Cotton Commission said the high prices are essentially due to a low inventory.
In years past, he said, there had been heavy cotton stocks in other parts of the world, though not quite as much in the U.S., which had reduced its cotton acreage overall by around 40 percent.
Because acreage reductions both in the U.S. and in the rest of the world had reduced the oversupply, the industry had hoped for higher prices last year. However, because of the state of the economy and decreased spending, cotton wasn’t being sold.
Acreage reductions and weather problems in China – the largest consumer and producer of cotton in the world – the recent flooding in Pakistan, and tight supplies in India, which halted its exports, have also squeezed stocks, Seaton said.
“Now, we’ve worked into a situation where cotton supplies are extremely tight and just about as soon as it’s harvested it’s being sold and manufactured,” he said. “The price is directly correlated to demand, and as tight as stocks are, it has pushed the price up to these levels.”
Helping with this year’s local bumper crop was near-perfect weather for cotton, according to Shepherd and John Ruark, who with his family runs the Bostwick Cotton Gin and grows about 800 acres of cotton, among other things. A handful of families are the main cotton producers locally.
“We were one or two rains from a perfect growing season,” Ruark said.
Shepherd and Ruark each also acknolwedged new technologies in seed varieties and a tillage method that reduces the water needed to grow cotton as playing roles in the high local yield.
To keep up with demand, Ruark and his family have been running the gin for 10 to 11 hours every day except Sunday, he said.
“We’ve already ginned more this year than we did the whole crop last year,” he said. He estimated they had ginned 2,500 bales through the first week of November, versus about 1,000 total bales last season.
“It’s just an unbelievable crop year for us,” he said.
While the higher prices are a good thing, Ruark said, most farmers probably won’t see the full benefit, having sold back when cotton was $0.70 or $0.80 a pound, already a good price.
“Nobody pictured cotton going to $1.35 or $1.40 a pound,” he said.
Shepherd, meanwhile, said it meant a lot that cotton farmers could "get back on track," having had two bad years in a row.
“We were really needing a good one,” he said.
Improvements in technology like the ones that helped this year were why his father predicted more than three bales an acre someday, Shepherd said. This year turned out to be the best the family has ever had.
“I wish he could have seen it,” he said.
Printed in the 12-2-10 edition