We recently held our annual Georgia Cotton Commission Annual Meeting and Cotton Production Conference.

Previously last month, I had the privilege of presenting the 2012 cotton outlook to the South Carolina Cotton Growers Annual Meeting. This week I also presented at the annual Virginia Cotton Meeting.

It is always good to have these opportunities to present and visit with growers and cotton industry folks, but especially in other states. I always come away having learned as much or more from them as they perhaps did from me.

Growers are encouraged by the recent improvement in price.

Obviously, the big questions on everyone’s minds are 1) will the uptrend continue and 2) when should growers begin, if not already, to contract or take some other form of price protection and how much?

We all recognize we are in a very different market/marketing environment now than we were just a few years ago.

Obviously, prices are determined globally by forces beyond our control and what happens or doesn’t happen in the U.S. is only one portion of the equation that determines price.

But more important than that, when cotton is $1 (well above the loan rate) the impact of not making a good decision on marketing can be disastrous compared to when cotton was in the 50s and 60s.

A question was asked (and I’m paraphrasing here), “What advice can you give (what should be a producers marketing plan or strategy) to deal with the new realities?”

To be honest with you, I didn’t have a good answer. I don’t think there is a good answer or there certainly is no perfect answer.

The canned answer is always “use Options” but I don’t think it’s that simple. It needs to be investigated, but the success of using an Option I think depends on at what Strike Price, for how much premium, and when you buy it.