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Cotton News

June 21, 2024

By June 28th, 2024No Comments

Welcome to the June 21, 2024 issue of Cotton News, a service provided by Plains Cotton Growers Inc. for the cotton industry in the Texas High Plains and beyond.

Faces of Cotton: Meet the Hollingsworths

For our next installment of the “Faces of Cotton” story series, meet Robert and Karen Hollingsworth of Claude, Texas. Watch the video version of their story on the right.

By Kara Bishop

Three-year-old Robert Hollingsworth gets up early Saturday morning. It’s time to check on his crops. He pulls his little boots on and heads outside to start up his tricycle. He’s planted some wheat and hay grazer in some rows he set up in the front yard, much to his daddy’s dismay. It’s wet and muddy this morning — a little too treacherous for a tricycle ride. Little Robert stares at his trike and thinks. He has to check his crops, and while he could just walk the ten feet over there, his daddy always drives out to the farm. So, he needs to drive out to his just like daddy does it.

Suddenly it comes to him. He finds some baling wire out in the garage and wraps his front tricycle tire in wire. He’ll cut some deep ruts in the yard, but he won’t get stuck. After all, his horse needs hay so he must press on. At three years old, Robert has all the makings of an ingenious steward of the land. Just like his daddy.

Farming is all he knows and is all he has ever wanted to do. With 280 acres of land that his great-grandfather homesteaded in 1906, he dreamed of farming it like his father and grandfather before him.

But the challenges that plague farmers today were roadblocks for young producers like Robert back then as well. Access to land, crop prices and input costs kept Robert from making a true living off the land. He went to work for the Texas Department of Transportation (TXDOT) in Panhandle, Texas, in 1982.

Stretched Thin

While he had a full-time job, Robert still wanted to farm. It was a punishing schedule during planting and harvest seasons.

8:00 a.m. to 4:30 p.m. – work at TXDOT
7:00 p.m. to 2:00 a.m. – plow or plant at the farm
2:00 a.m. – 6:00 a.m. – nap, shower and get ready for work

When he had a spare moment, he worked on his sons’ race cars and took them to races on the weekends.

“If I could get four hours of sleep a night, I felt pretty lucky,” he said.

Robert may have been stretched thin, but that didn’t make him mediocre. For TXDOT, he invented a lay-down machine that fits on the front of a maintainer for paving roads. Robert’s invention would lay the road automatically with very little shovel work involved. His lay-down contraption became a model and showpiece for other districts to copy and implement into their processes. Because his innovation reduced man hours and manpower needed, the state of Texas saved $30 million annually on road systems.

He competed in state and national events with his invention — and won, giving the $10,000 in proceeds to the West Texas A&M engineering program.

Second Chance

On January 1, 2009, Robert transferred to the Groom TXDOT office and became Karen’s boss.

Neither Robert nor Karen could have imagined their union taking place. Both were convinced they’d never marry again. Both were content with that.

Finding each other just happened.

“It was from the Lord,” Robert said.

“It was weird,” Karen added. “The first time we held hands, I just knew I had the right person. I would have married him right then had he asked me to.”

When Karen’s job in Groom became a district-wide position, she transferred to the Pampa office. Robert and Karen began dating at that time and marry in 2010.

Enjoying the Reward

Today Robert and Karen live in a beautiful red barndominium they built five years ago after almost a decade of sketching, designing and dreaming.

They farm dryland milo, wheat, cotton and run a few cows. They love spending time with their grandkids and the RV life, when time allows, working together and playing pickle ball.

It took Robert years to acquire the land, equipment and assets needed to make farming work full time. He retired from TXDOT in 2012 and now does what he’s always wanted to do. Farm the land. While driving to a section outside of Claude, he said, “It took me 28 years to put this section of land together. I bought it piece by piece and had a couple of half circles sold out from under me a couple of times, but I finally got it.”

During Thanksgiving in 2016, Robert and Karen decided they were going to try growing cotton. Karen printed everything out she could find on it and made a book for Robert to study by the fire in the winter.

“I would cuss those boys around me for growing cotton, because I hated it so much,” Robert added. “We were grain farmers, so, when we decided it was a good idea to implement cotton into our rotation, I ate a lot of crow and apologized to every one of those guys. Cotton was just something we never thought we would grow, in fact, my dad would be rolling in his grave if he knew we were farming it today.”

Their 2017 crop was the best cotton crop they’ve harvested so far, producing 2.9 bales per acre of dryland cotton that year.

“The biggest things we learned were to not be afraid to plant that cotton seed a little deeper and to use plant growth regulator,” Karen said.

People often seem surprised at how well Robert and Karen work together. It’s not your typical husband/wife dynamic. But it’s not every day two people get a second chance at love, either. They’re grateful for each other and never take it for granted. They do it all, just the two of them, planting, spraying, harvesting year after year after year.

“We laugh together, we cry together, we play hard, we work hard, and we just enjoy life.” Robert said. “The Lord has blessed us and provided all we have ever needed.”The cotton they planted in late April came up and is still going strong.

“I have faith that the Lord will provide what I need,” Robert said. “He’s taken great care of me so far.”

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CBO Releases Updated Budget and Economic Analysis

By Jim Wiesemeyer, ProFarmer

The Congressional Budget Office (CBO) released its updated projections for the federal budget and economy from 2024 to 2034.

Key Highlights

Budget projections:

  • 2024 deficit: Projected at $1.9 trillion, or $2.0 trillion (7.0% of GDP) when adjusted for timing shifts.
  • 2034 deficit: Expected to reach $2.8 trillion (6.9% of GDP).
  • 2024-2034 total deficit: Estimated at $24 trillion, 70% larger than the historical average relative to economic output.
  • Federal outlays: Expected to rise from 24.2% of GDP in 2024 to 24.9% in 2034, driven by increased interest costs and spending on Medicare and Social Security.
  • Federal revenues: Forecasted to increase from 17.2% of GDP in 2024 to 18.0% by 2027, stabilizing near that level through 2034.
  • Public debt: Projected to rise from 99% of GDP in 2024 to 122% in 2034, surpassing its historical peak.

Changes in budget projections:

  • The 2024 deficit is $0.4 trillion higher than previously projected in February 2024, due to:
    • $145 billion increase in student loan outlays.
    • $70 billion increase in deposit insurance outlays.
    • $60 billion increase due to newly enacted legislation.
    • $50 billion increase in Medicaid outlays.
  • Over the 2025-2034 period, the cumulative deficit is larger by $2.1 trillion, mainly due to newly enacted legislation, including $95 billion for aid to Ukraine, Israel, and the Indo-Pacific region.

Economic projections:

  • Economic growth: Expected to slow from 3.1% in 2023 to 2.0% in 2024.
  • Inflation: Projected to be slightly lower in 2024 than in 2023, due to recovered supply chains, higher unemployment, and increased long-term interest rates.
  • Interest rates: Short-term rates are expected to remain high, with the federal funds rate at its highest since 2001.

Immigration surge:

  • From 2021 to 2026, net immigration is projected to be 8.7 million higher than historical levels.
  • The surge is expected to increase nominal GDP by $8.9 trillion (2.4%) over the 2024-2034 period.
  • The immigration surge will raise interest rates by 0.1 percentage point by 2034 and lower deficits by $0.9 trillion, with revenues increasing by $1.2 trillion and mandatory spending and interest outlays rising by $0.3 trillion.

CBO says that one culprit for the larger deficit this year is Congress’s recent military aid bill. But overall defense spending is still falling as a share of the economy and is expected to hit a postwar low of 2.8% of GDP in 2034. Also, if spending as a share of GDP remained at the pre-pandemic average, the deficit would be roughly $890 billion this year and $13.4 trillion smaller than CBO’s 10-year projection. This would keep debt as a share of GDP at roughly 90%.

Phillip L. Swagel, CBO’s Director, emphasizes that these projections incorporate the impacts of the immigration surge and recent legislative changes on the federal budget and economy.

CBO projects $1.9 trillion federal budget deficit for FY 2024. The Congressional Budget Office (CBO) estimates that the federal budget deficit for FY 2024 will reach $1.9 trillion, which is $400 billion higher than the estimate from four months ago. ($300 billion larger than last year’s deficit). The increase is attributed to President Biden’s student loan forgiveness program (which CBO estimates could cost $211 billion this year above what it estimated in February), spending on Ukraine, Israel, and the Indo-Pacific region, slow recovery of bank failure costs by the FDIC, and higher Medicare spending (higher enrollment). CBO increased its Affordable Care Act (ACA/ObamaCare) spending estimate by $22 billion for this year and $244 billion over the next decade. It also raised its ACA enrollment projection by four million for this year and an average of three million over the next 10 years.

Over the next decade, the CBO projects the deficit will total $24 trillion. Link to report.

— The interest burden of the debt is significant. According to EconoFact Chats (link):

  • Interest payments on federal government debt are projected to be $892 billion in 2024,representing 3.1% of GDP. Net outlays for interest have never exceeded 3.2% of GDP since 1940.
  • Interest payments, at 13% of federal spending in 2024, represent the third highest category of spending, ahead of spending on defense, Medicare and income security programs. This contrasts with the situation in 2017 when net interest payments made up 7% of government outlays.
  • Projections of the interest burden of the debt have increased dramatically over the past four years. The Congressional Budget Office currently projects that interest payments on debt will be about 15% of federal spending in 2030. Four years ago, the projection for 2030 was about 9%.
  • Rising levels of debt service contribute to fiscal challenges. Higher interest payments mean less government spending is available for defense, social safety net programs, research, and other important government functions like a farm bill.

CBO is big player in farm bill negotiations.

The CBO is the official scorekeeper of legislative proposals and in release a farm bill baseline. The ongoing farm bill debate has a $1.51 trillion baseline over ten years. While CBO on Tuesday updated its forecasts, the farm bill baseline remains the same because House Ag Chair GT Thompson (R-Pa.) got his proposal approved in his panel by the end of May.

CBO now says USDA’s use of its Section 5 authority under the CCC would total $12 billion from fiscal year (FY) 2025 through 2034. In February, USDA estimated that it would spend $15 billion over that period. But either tally is nowhere near the $50 billion or more the House Agriculture Committee needs to fund commodity program increases.

Link to CBO estimates of CCC spending

Link to CBO June 2024 baseline

Link to CBO June 2024 SNAP spending | Another link to CBP on SNAP

Stabenow uses CBO updates to make her farm bill case.

The new CBO projections “prove what we have been saying all along: the House Republican farm bill is unpaid-for, relying on magic math and wishful thinking,” Sen. Debbie Stabenow (D-MI) said in a statement. “In exchange for blocking USDA’s ability to provide real time assistance to farmers through the CCC to address emerging challenges, House Republicans received only a small fraction of the $50 billion hole they need to fill to pay for their bill,” she said.

Stabenow said her Rural Prosperity and Food Security Act “is meaningful and responsible.

“And, importantly, it does not fracture the farm and food coalition that is the foundation of every successful farm bill,” she added. “I did the hard work of securing new resources outside of the farm bill through $2.3 billion invested in trade promotion and food aid and a $5 billion commitment in bipartisan offsets from my Leadership. It’s time to get real and stop the posturing and the rhetoric. It’s time to negotiate in reality. My door is open.”

Sen. John Boozman (R-AR), ranking member of the Senate Ag Committee, told us via an AgriTalk interview on Tuesday (link) that he thinks the House needs to pass its farm bill to put pressure on Stabenow and Democrats.

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