What is in this article?:
- Cotton markets, Texas drought and overseas production questions
- Comments on growing season
- Are Chinese reserves empty?
• Cotton marketer, speaking at the SCGA summer meeting, talks about issues facing crop in markets.
• Questions USDA estimates of Texas production.
• Explains impact of drought conditions hitting Texas growers, cattlemen.
Comments on growing season
On the current growing season…
“I’ve never seen a year like this one. All spring, keeping an eye on weather patterns, forecasts said it would be exceptionally dry…
“The last rain we had here was in October of 2010 — three-quarters of an inch. That’s the last moisture of any sort we’ve had here. The entire South Plains region had good rains in July (of 2010) but it’s been very dry since that time.
“I farm 450 acres with drip-irrigation with my son-in-law, Lee Riggins. Earlier in the season, we thought ‘if we can just get that 450 acres up, there will be a rain somewhere to help it and we’ll be okay.’ In retrospect, I wish we hadn’t tried so hard to get the crop up.
“Typically, we average around three to 3.5 bales on the drip acreage. This year, we may make one bale, maybe 1.5 bales.”
On unprecedented drought…
“I’ve never seen a year with this sort of drought. I also run a herd of cows and we have stock tanks going dry that never have gone dry before. We’ve had to sell most of the herd because there’s no grass or water for them.
“It is incredibly dry here. I’ve never seen irrigated crops in the Texas High Plains look so poor. You can drive mile after mile and maybe a quarter of the fields look even halfway normal.
“Many irrigated farmers are having difficulties with wells pumping sand because they have the surges of water that come as a result of not having sufficient water levels. Many different practices are being used to finish the summer. The most drastic measure is just turning the water off.”
On abandoning crops…
“About 10 days ago, I finally gave up on my cotton. I’ve turned the irrigation water off.
“I’m not alone. There are a lot of farmers turning water off and saying ‘we can’t afford any more inputs.’
“Some people ask me how much off historical yields the irrigated crops are. I think they’ll be off at least a half (the normal yield). It could be more than that. It’s very hard to tell because when you do find a good crop, it looks very good.
“August can be the month that makes a good crop give up, so it may be the month that puts the proverbial ‘straw that broke the camel’s back’ on some marginal crops.”
On how the markets look currently…
“We always say high prices will cure high prices faster than anything. That happened last year — the market over-reached into extremely high prices because mills were buying cotton in panic mode.The frenzy that occurred last year was a result of the perfect storm of circumstances.
“As a result, we probably saw 2 to 3 percent of mill usage convert to some sort of manmade fibers. That conversion has helped out with the short cotton supply. When the panic began to subside and mills could step back before buying, the market made the extreme down move.
“According to the experts, we’re about two million bales short on what the U.S. crop can provide as far as existing sales. Going into the new crop there’s demand to help fulfill commitments and should help prices stabilize and go back up until it hopefully finds a trading range.”
On overseas cotton production…
“The big question is: are there any other 2011 weather markets that affect crops? China is always a big question mark — are we getting a correct picture? Are their projections way off? Will there be a big surprise from the Chinese?