With cotton futures trading at $1 a pound, everyone in the cotton industry ges excited about the crop. But a strong cotton marker bodes well for agriculture beyond the current market offerings.
When cotton futures touch the promised land of $1 a pound farmers, ginners, and everyone else interested in or invested in the cotton industry get a bit excited. And with at least average yields expected across much of the Cotton Belt this fall, folks are looking for more than a decent profit from their labors.
Jeannie Hileman, manager of Farmers’ Co-op Gin in Carnegie, Oklahoma, says her customers are looking for a good payday from the 2010 crop, whether they hit $1 a pound or not.
“Most of our customers are in the Plains Cotton Cooperative Association marketing pool,” Hileman says, “so prices are already set on some of this crop. But for farmers with open cotton, it’s pretty exciting.”
She encourages farmers with unpriced cotton to take advantage of current market opportunities. “They have to have 100 bales to lock in a price, so if they have enough, they should take it,” she says.
Dollar cotton means more to the Central Oklahoma farming community than just a good paycheck for this crop, she says. “We can grow most anything in this area so we always compete for acreage. We do all we can to get the best turnout and the highest grades we can for our customers. We try to get them an extra dollar so they’ll keep planting cotton.”
With cotton hovering around $1 a pound, it competes well with corn, peanuts and wheat, Hileman says.
Farmers’ Co-op expects to gin from 15,000 to 18,000 bales this year, possibly matching last year’s record 18,364 bales, a 60 percent jump from 2008 and 11,252 bales and a quantum leap from just 10 years ago when the gin pushed out only 401 bales.
Hileman says several factors account for the increase. More acreage is the main thing. “We’re up significantly this year,” says. So even with yield projections running slightly less than 2009, total production should at least equal last year.
Hileman says Boll Weevil Eradication has brought cotton back to the area and improved yield potential.
Other factors that make cotton competitive include farm bill changes following the Freedom to Farm Act of 1996 that favored grain and soybeans. Peanut program changes also encouraged farmers to switch to cotton. Also, farmers’ need for a sound rotation crop favors a return to cotton for many.
“Cotton is important to the area,” Hileman says. “For years, farmers planted grain or soybeans with no rotation and brought on weed and disease problems. It’s better if we remain diversified and keep all our crop facilities in operation.”
And she’ll keep competing for a fair acreage for cotton. At $1 a pound, her job is a little easier.