What is in this article?:
- Mid 70-cent cotton price expected to be around awhile
- Fewer acres expected in 2013
• The mid 70-cent range is actually a good price level, given depressed worldwide cotton demand and other related factors.
• Putting a lid on cotton prices includes enormous world stocks in the 76-million-bale range which represents a stocks-to-use ratio of 71 percent, the highest level since 1960.
Fewer acres expected in 2013
Due to current soft cotton prices, Neeper predicts fewer cotton acres next year in the U.S. and abroad. Domestically, the chief reasons are price competition for grains and soybeans, plus the ongoing drought in Texas, Oklahoma, and Kansas.
During the Calcot chairman’s report, Ron Rayner expressed disappointment in Congress’ inability to implement a new farm law prior to the Sept. 30 expiration of the previous farm program.
“I am not optimistic that Congress will pass a new farm law by year’s end,” Rayner said. “It’s looking more and more likely that Congress will pass a one-year or shorter extension.”
As the cotton industry is well aware, the next farm bill will likely be dramatically different from cotton programs in previous farm laws.
“The direct payment program, which cotton growers have relied on for its safety net feature over the last several years, will likely be deleted in the next farm law,” Rayner said. “This will make bankers nervous about committing funds to growers without a safety net as growers develop production budgets soon for the 2013 crop year.”
Rayner says congressional indecisiveness on the farm bill results in instability for the cotton industry and threatens the large financial investments in its intensive infrastructure.
Calcot was launched in 1927 as a small co-op with a handful of grower members in California. Today, the 85-year-old cooperative is a multi-million dollar business.