Based on predictions of record-high prices this year and a major increase in worldwide demand, Lenoir County farmers – and their counterparts across the nation – significantly boosted the acreage they devoted to cotton this season.
That decision could end up hurting them, though, as demand for cotton in emerging economies such as China and India has slowed so much, cotton market watchers predict a surplus this year.
“The combination of a record cotton crop and falling consumption will expand global stockpiles by the most since 2005, driving further declines in the price of this year’s worst-performing commodity,” Bloomberg News stated earlier this month.
Cotton growers in the U.S. – including those in Lenoir County – were also hurt by an extended summer drought. Locally, the drought was followed by the devastating winds of Hurricane Irene.
“It’s just a combination of environmental conditions that really affected the latter half of the cotton crop,” said Walter Adams, an agricultural and natural resources technician with the Lenoir County Cooperative Extension.
The per-pound price of cotton stood at 87 cents as of the end of last week, a precipitous decline from its March height of $2.29, according to indexmundi.com.
Those prices were about where John Flanagan, president of the Flanagan Trading Corp. in Fuquay-Varina, expected they would be when he spoke during the annual Kinston gathering of cotton growers in January – the price was $1.78 a pound at the time.
Flanagan expected cotton farmers would do well, though, because worldwide demand for apparel, especially in India and China, was increasing.
“(It’s) the uncertain economic outlook that has really caused consumers worldwide to hold back on purchases,” he said last week. “Each time we thought we had it solved, (we had) the U.S. debt crisis, then they come up with the European debt crisis; it’s just an ongoing thing that hasn’t been fully resolved yet.”
Although farmers have been hurt by the state of the cotton, Flanagan said the expected surplus will give a cushion to cotton mills as they go forward.
“When this happens they don’t hit the panic button like they did last year,” he said of mill operators.
Adams said the acreage devoted to cotton in Lenoir County increased “dramatically” from last year, but the quality of the crop was hurt by the heat and dry weather.
He said the lower bowls on the plants were able to open this year and produce wisps of cotton, but the heat – as well as the hurricane – stopped the upper bowls from opening.
Adams said that hurt the quality and amount of the Lenoir County cotton yield this year.
“They’re not going to get the best prices for the cotton,” he said of the farmers.
Scott Wooten, who grows cotton in Lenoir and Greene counties, said the yields in his fields this year ranged from 171 pounds to about 1,000 pounds.
He also picks cotton for some of his fellow farmers in the area.
“The drought’s what stole the cotton,” he said. “The hurricane just twisted it up.”
Wooten said cotton plants are technically trees, and they reacted to the drought much in the way typical trees do, by dropping their leaves to conserve water. In the cotton plants’ case, they dropped their “squares,” the small growths that turn into flowers and then bowls.
“It drops them off until the conditions are right for it to grow,” he explained. “It’s a pretty smart plant.”
Wooten’s fellow farmer, Stephen Porter, is normally a produce grower, but he added cotton to his rotation for the first time this year.
He was hoping to get 1,000 pounds from his fields, but ended up with 700.
Even with the lower-than-expected yield, Porter said he plans to grow cotton next year if prices stay where they are now.
“Unless it starts going way down I plan on planting cotton next year, but if it gets down to 70 cents it’d probably be soybeans,” he said.
2011 cotton prices, per pound:
December: 87 cents