This time last year cotton producers were almost calling it quits. The soil was too dry, it was a desperate plea for some moisture. Finally, this year, cotton crops across the South Plains received some much needed rain. The cotton crop is shaping up.
Director, of Texas Tech’s Cotton Economic Research Institute Darren Hudson said, “Things are looking different this year.”
However, last year’s drought the dry conditions were disastrous, affecting the very livelihood of cotton producers.
Cotton producer Steven Brosch said, “The fact that we can see green this year, it’s amazing.”
Providing the fuel for the healthy seedlings is good ole’ Mother Nature. Brosch said thanks to storm clouds the outlook is brighter, but he’s only cautiously optimistic.
“We know we don’t have a crop yet,” he said. “We have a long ways to making a crop. The way its turning out right now, we have a good shot at it.”
However, prospects for the other kind of green are not so great. Cotton futures have dropped about 60 percent in just the last six months. Today’s price is down from a $1.10 last year to about 70 cents now.
“It’s going to put a lot of pressure on the farmers for profitability, but if they make a crop it has an impact on the rest of us like the cotton gins, the warehouses, and the seeds and then it filters out through the rest of the economy,” Hudson said.
The reason for the drop in price is supply and demand.
“Fairly substantial weakness globally, as the result of the continued economic struggling demand worldwide, Chinese demand has dropped off.”
“Cotton is the best suited crop for this area, so we really don’t have a choice,” Brosch said. “We can’t just switch to corn, or something that might have a better price. As far as the business we have to watch our costs, when the price of cotton gets that low.
Brosch said the true test will be in a couple of weeks to see if the cotton will actually start to grow.