What is in this article?:
- Big cotton crop could put premium on storage this fall
- Freight fee
- Some challenging options
• Finding a place to store and efficiently transport cotton bales to waiting ships bound for overseas ports may not be as easy this year as it has been in recent years and likely not as economical for growers and ginners.
Some challenging options
It is likely this fall that cotton buyers will face some challenging options on where to buy cotton and where not to buy cotton. For example, he may call one warehouse on Aug. 1, and ask for 20,000 bales of cotton and be told that cotton can be shipped until Oct. 1.
He may make the same call with the same request to warehouse 2 and be told the 20,000 bales of cotton can be shipped Aug. 21.
The first warehouse may make more money on that particular 20,000 bales of cotton, but whether they will make any money on the next 20,000 bales is uncertain.
For warehouses set up to store, find and move cotton efficiently, getting cotton out the door, even with high volumes of cotton expected this year, won’t be a problem and won’t prevent them from being profitable.
The United States Warehouse Act (USWA) authorizes the Secretary of Agriculture to license warehouse operators who store agricultural products. Warehouse operators that apply must meet the USDA standards established within the USWA and its regulations.
Application is voluntary. Applicants agree to be licensed under the USWA, observe the rules for licensing and pay associated user fees.
A list of USDA approved cotton warehouses can be found on the USDA website by searching ‘U.S. cotton warehouse capacity’.
In general, licensees under the USWA are expected to have (each ofthe following characteristics):
Responsible persons and organizations, with a good business reputation, who:
• Are in the business of public warehousing;
• Have adequate financial resources to operate their business, and
• Have knowledge of and experience in generally accepted warehousing practices for cotton.
Have facilities that:
• Are physically and operationally suitable for the protection of cotton in store;
• Allow for the accurate and efficient weighing, sampling, and inspection of the cotton in store, and
• Are within the control, extending to the immediate surrounding environment, of the warehouse operator.
Have personnel available who:
• Have knowledge and experience in weighing, sampling, and inspection of cotton;
• Are able to assist the FSA warehouse examiner with examinations, and
• Have integrity, good judgment and proven performance.
Finding a good cotton warehouse may not be as critical to the 2011 cotton crop in the Carolinas and Virginia as few timely rain showers, but it will be critical to the long-term growth of the cotton industry in the region.