RALLS, Texas - The twin shadows of high production costs and the World Trade Organization judgment against the U.S. cotton program could have cast a pall of pessimism over High Plains cotton farmers as they prepared to plant the 2004 crop.
Growers say record prices for fuel and fertilizer as well as significant increases for seed and equipment, viewed against the backdrop of an uncertain market, indicates profit margins painfully squeezed like a sore thumb in a shop vice.
Consequently, one would expect some slow riding and sad singing from farmers who seem to get more bad breaks than good ones from weather, government and market gremlins. One might be wrong.
“We go into planting season expecting to make the best crop ever,” says Chad Davis, a Ralls, Texas, farmer who started his planting season with a busted rod on a field cultivator and an optimistic outlook for what he sees as promising planting prospects.
“We have pretty good soil moisture to get this crop started,” he says. “We just need one good planting rain and we’ll be in good shape.”
Other farmers echo the sentiment. “We’ve had about 10 inches of rain so far this year,” says Dale Kitchens, who’ll raise 6,000 acres of skip-row cotton near Slaton. “We’ve had almost perfect rain. Most of it soaked into the soil. We had little runoff and little soil erosion.”
“If we hadn’t gotten that good rain, we would be in trouble,” says Don Marble, South Plains, Texas. “With fuel prices as high as they are, we’d have spent a fortune on irrigation just to get this crop up. But we’re in good shape for planting.”
“I’m actually excited,” says Steve Chapman of Lorenzo. “We have as good a moisture profile as I’ve seen in several years. Prices now are low but I hope to take advantage of movements later, maybe if we see more soybeans and corn planted.”
All four are watching costs closely but are reluctant to make wholesale changes to farming operations that work.
“I’m cutting back on seeding rate,” says Kitchens. He says with light water resources he’ll use moisture more efficiently with fewer plants per acre. Skip row cotton, a proven program on his farm, also helps conserve water.
He’ll stick with his tried and true tillage system. He chisels his land and says the deep tillage softens the soil and allows it to soak up moisture.
Marble has cut back on tillage operations for the past three years and cut expenses for fuel, labor and equipment in the process. “We used to go the whole run of tillage,” he says. “Now, we’re not quite minimum-till but we leave the beds and never tear them down. We’re using about half as much tillage as we did before and we’re burning about half as much diesel. We put fewer hours on our equipment and need less labor.”
He says seed and fertilizer costs popped up significantly but play too important a role in production success to cut.
“If someone had told me 20 years ago I’d pay $150 or $200 a bag for cottonseed, I’d have laughed him out of my office. Seed costs are high but the enhanced varieties we plant have the potential to make a lot of cotton and a lot of higher quality cotton.”
He says fertilizer costs jumped through the roof this spring. “But I can’t afford not to put it out. Anhydrous ammonia at $400 a ton is acceptable. We have to have it to make a crop. If I’m going to farm, I’m going to put fertilizer on my crop.”
Kitchens agrees. He says fertilizer prices are 40 percent higher than last year and they were up considerably then. “I was lucky to get some reasonably priced inventory last year,” he says. “But this year, fertilizer is the highest I’ve ever seen and fuel costs are up too. All that with a roller coaster market.”
Kitchens says he’ll not cut back on fertility, even in “hard economic times. I use a zone placement system that improves fertilizer efficiency,” he says. “I place fertilizer 6 inches deep and 6 inches to the side of the cotton row. That way I don’t burn young seedlings, and it’s close enough for a quick response.”
He says broadcast fertilizer application leaves most of the nutrients in the top 2 inches of soil, “where the dry soil is. At 6 inches, it’s in the moisture zone where roots can pick it up.”
He says skip-row helps with fertilizer efficiency, too. “I don’t fertilize the blank rows, so I save about one-third that way.”
Kitchens plants about half his cotton in Roundup Ready varieties but still uses a pre-emergence herbicide. “I use pre-emergence on everything,” he says. “It’s too risky not to.”
Chapman is cutting back on tillage. “I’m moving more and more to minimum tillage each year,” he says. “I need Roundup Ready varieties to do that.”
Davis is moving back to reduced tillage systems. “I did it before but got away from it,” he says. “I planted rye in every other row this winter for a cover crop.”
Cotton farmers across the belt face similar problems this spring, and many are following similar tactics, staying with the basics that work, improving efficiency where possible and hoping that rainfall in-season is adequate. But many express frustration at political shenanigans they can’t manage around.
“We’re already on a market roller coaster,” Kitchens says. “If the WTO decision holds, we might get to 30-cent cotton. This market is as uncertain as any I’ve ever seen.
“I’ve been scared for three years that the WTO would jump up and bite us. If we do get down to 30-cent cotton a lot of this land will be a big cow pasture.”
Kitchens has traveled to Brazil three times and understands the motivation.
“They have only about 20 percent to 30 percent of their available land under cultivation. They have cheap labor and cotton could explode down there. And agricultural exports are important to Brazil.”
“I don’t think we’re making a big enough deal out of this WTO ruling” Chapman says. “They won’t stop with cotton; they’ll be after grain and soybeans, too.”
Marble, who has been close to farm program negotiations for the better part of four decades, agrees that the ruling will “not be just about cotton. But I don’t think the United States will ever allow a country like Brazil to tell us how to run our business. You know, you can get out of this country and find people who will sell their souls for anything. Most are only interested in what they can get for themselves.
“In the long run I don’t think this ruling will be a big influence on our farm program. But critics inside the United States will use the WTO stance as ammunition.”
Even with peril looming on the horizon, farmers seem to pull on some intangible well of optimism to put in another crop and, like Davis, assume that this one will be the bin buster they’ve been waiting for.