December 2, 2022

At the Amarillo Farm and Ranch Show Cotton Conference yesterday, Kody Bessent, Plains Cotton Growers CEO, opened his outlook presentation saying, “It’s been a wild year.” 

Many High Plains producers, ginners and merchants have stated this year is unprecedented in terms of input costs, market volatility, crop conditions, etc. 

The High Plains is not alone.  

Georgia

“The southeast had a decent crop year,” said Taylor Sills, executive director of the Georgia Cotton Commission. “We needed it, too. Parts of the state, especially southwest Georgia, hasn’t had a good crop in four to five years.” 

Sills added that Georgia has harvested roughly 90% of their crop, but overall yield is still hard to measure at this point. 

“I think Georgia farmers could plant a lot more corn in 2023, but time will tell.” 

Oklahoma

 “The gin is going to process maybe 8% to 10% of what it normally gins,” said Tom Buchanan with Cotton Growers Co-Op in Altus, Oklahoma. “We’re at a relative total loss in this area.” 

Buhanan added that Tillman County, east of Altus, has about 15,000 acres with good groundwater, which has resulted in better quality and good yields.

“The bright spot is that it’s wet out here, which is a good issue to have for next year. This is as green as this country has looked in a long time. A lot of wheat has been planted, which is what our guys are using for their cover crops. These are the best wheat stands we’ve had in years. It makes you feel better when you drive down the road and the country is green.”

He added that the lake’s level still needed to rise for next year’s success. 

“We all need to start going to church,” Buchanan quipped. “We all need more rain!”  

South Texas

“Smith Gin Coop typically gins 85,000 to 100,000 bales — this year we ginned 20,000,” said Jon Whatley, producer in San Patricio and Nueces Counties in the Coastal Bend region. “Ginning after the demand charge was a huge concern for us this year.” 

North of Corpus Christi the crop never came up, added Whatley. “South of Corpus Christi there was some cotton and a little along the coast, but the crop year was pretty much awful from beginning to end. And windy.” 

Toby Robertson, producer in Nueces County, said yields were better than expected in terms of quality, but yield suffered. “My average for the last five years is around 1,300 pounds per acre. This year I averaged 300 pounds per acre.” Robertson harvested 85% of his crop, battling 10 inches of rain during the last two weeks of the harvest season. 

“Out of 25 years of farming, this crop year is No. 1 on my hit list,” he added. “I can’t forget it.” 

Due to the rainy season South Texas is currently experiencing, next season is off to a good start as far as moisture is concerned, but input prices are another story. 

“Obviously, there’s time between now and planting,” Bessent said. “However, given where prices sit compared to input cost, there are many producers concerned about what they’re going to do next year. There are opportunities to take advantage of, but much is still uncertain.”  

The Senate passed legislation Thursday with a 80 to 15 vote to avert a rail shutdown following a warning from President Joe Biden that a strike could cause economic turmoil 

The measure is now headed to the president’s desk to be signed into law. 

Without Congressional action, a rail strike could have begun as early as December 9, causing product shortages, spiking prices and halting factory production.

It could have also disrupted commuter rail services for millions of travellers a day as well as the daily transportation of thousands of carloads of food and farm products, among other items, according to a collection of business groups. 

Union leaders, however, are not pleased with the deal brokered by the White House, arguing it did not meet workers’ demands for paid sick leave. 

– Jim Wiesemeyer, ProFarmer

The following is a summary of the cotton classed at the Lubbock and Lamesa USDA Cotton Division Cotton Classing Offices for the 2022 production season.

Given the volatile nature of the market, Darren Newton, southwest cotton buyer for Viterra Agriculture USA, advises to watch it vigilantly.  

“Putting your 2022 crop to bed when the market gives you an opportunity isn’t a bad idea, because then you can focus on next year,” he added. 

He went on to say that he understands input prices are high and prices are not optimal, but taking advantage of a “good price” when you see it rather than waiting may be your best option. 

Why are prices not where they should be? It’s all about demand. 

“We can see the market looking for the demand,” Newton said. “It’s just not there. The Far East needs to buy some cotton for the market to pick up.”

The entire supply chain is well stocked from the textile mills to retail stores. “It’s scary when you can pick up the phone and have any size of jeans sent to you overnight,” said Jon Whatley, producer in South Texas, whose wife co-owns Blue Ribbon Country Store in Beeville, Texas. “The retail side didn’t even see that before the COVID-19 pandemic and now everything is so well stocked, they’re trying to offset by sending you more product than you ordered.”  

So, moral of the story: if you see a price that works within your margins, jump on it.