What is in this article?:
• Finding parts to keep gins in tip-top shape has become harder and harder due to industry consolidation.
• Gins will likely reduce shifts as less cotton comes off Mid-South farms, George LaCour says.
• Re-employing those workers after a year or more off could be difficult, especially if they’ve found work elsewhere.
AS GINNERS, we're bracing for the worst in 2013, says George LaCour, past president of the Southern Cotton Ginners Assocation. "But we have to keep a strong association to help us get through this downturn as best we can."
George Lacour’s term as president of the Southern Cotton Ginners Association began pleasantly enough.
In the spring of 2012, soybean futures were around $12 a bushel, corn was under $6 a bushel, and cotton around 90 cents a pound. A producer with a diverse crop mix could make good money on just about any crop.
Then all heck broke loose.
World record cotton stocks and softening cotton demand, coupled with a drought in the Midwest that devastated the U.S. corn crop, changed the entire dynamic.
By the end of the growing season, soybeans were over $17 a bushel, corn was over $8, and cotton had fallen to 73 cents a pound. Cotton’s outlook had turned from bright to bleak in a span of months.
By early fall, the U.S. cotton industry was looking at the possibility for significant reductions in cotton acreage for 2013, perhaps as high as 40 percent to 50 percent, as producers are expected to rush toward the glitter of high prices in alternative crops.
LaCour, his successor Robert Royal, and SCGA are facing what could be a pivotal year in the history of U.S. cotton production. While a significant cutback in acreage is exactly what the cotton industry needs to put fundamentals back in balance, at the same time the cotton industry must find ways to preserve current ginning capacity until this happens.
“Thank God we have the option to plant another crop, so we don’t have to plant cotton for another year, and we can reduce this surplus,” LaCour says. “If we don’t reduce this surplus, we’re never going to get a good price for cotton.”
Back at the Tri-Parish Gin in Lettsworth, La., LaCour and gin manager Peggy Grazeffi are preparing to “run lean and mean for a few years — we’re trying to figure out a way to survive a bad time in the industry.”
Not every gin shares that philosophy, LaCour says. “I’ve seen two gins close because they didn’t think they were going to make money this year. I think that was a very quick decision to make, considering they’ve been in operation for half a century. You don’t give up when you don’t make money one year.”
That’s not all that’s troubling LaCour.
Finding parts to keep gins in tip-top shape has become harder and harder due to industry consolidation. “You used to just run up the road to Rayville, buy a part and come back. Today, if you think you might need a part at some point in the season, you’d better find one now. You can’t go to a John Deere store to buy parts for a cotton gin.”