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• The average high price predicted by leaders of the Southeast cotton industry, based on mid-April conditions is $1.85 per pound.
• Perhaps more optimistic for growers, the average low prices, according to the group, will be 85 cents per pound.
U.S. textile industry making gains
The U.S. textile industry made some significant gains in 2010. New production generated new domestic demand for cotton. U.S. textile plants reversed a long ongoing trend of domestic use, kicking up cotton use by over 300,000 bales in 2010.
“A driving question we frequently get asked is “Can we meet the demand for uniforms for U.S. armed forces with U.S. grown, U.S. spun cotton. The answer is always yes, but last year we were much more confident with our ‘yes’, Hubbard adds.
Cotton warehouses need to work together to continue to give U.S. grown cotton an edge over foreign competitors, says Coalter Paxton, president of the Cotton Warehouse Association of America (CWAA).
Cotton warehouse operations have had to be extremely flexible over the past few years, going from historic low supplies in 2009 to a 50 percent increase in production last year. It is a testament to warehouse owners and managers that they maintained the infrastructure to handle 12 million acres of cotton production last year, Paxton stresses.
CWAA is a national trade association representing a diverse, but unified, group of cotton warehouse operators from the Carolinas to California. Membership includes independent, gin, merchant, and transit warehouses.
The upcoming farm bill will be critical to all factions of the cotton industry, Paxton says. “It is important that we work hard to work together,” he adds.
The cotton industry is coming off a year in which commodity prices were high, much like back in 1996. At that time, the Republican-elected Congress was seeking big budget cuts, much like the Democrats are seeking today. The big difference, Paxton stresses is that our government’s fiscal house is in much bigger disarray going into the 2012 farm bill year than it was back in 1996.
Industry is predicting more than 13 million acres of cotton will be planted in 2011. With a good production year, that much cotton will stress the entire cotton system from the time farmers put seed in the ground until the finished product reaches the textile mill, he adds.
Paxton says key issues for the cotton industry will include:
• Timeliness of pickup of cotton from warehouses
• Quality and quantity of shipping options;
• Structure of warehouse charges and tariffs;
• Expanded contract delivery points;
• The way bales are blocked and ordered out;
• The transparency of basis charges.
“In the past 12 months we’ve shipped more cotton than anyone thought possible. Some issues related to timely pickup and delivery were paramount. Before that growers were pushed to deliver on contracts and expanding delivery points for growers were made clear,” Paxton says.