Being in the ginning business, and a long-time grower, made cutting cotton acreage in half especially tough for Stantonsburg, N.C. grower Audie Murphy, but the decision, he says was dictated by doubts in cotton pricing and government support.
“It’s a scary situation for growers when China owns over half the cotton grown in the world. One change in policy and we could be looking at 60 cents a pound cotton,” Murphy says.
Like most folks in the cotton growing business, he says prices in the 60 cent range per acre aren’t enough to sustain production.
Some cotton marketing experts contend world cotton prices below 70-75 cents a pound would allow Chinese mills to buy cotton cheaper than they can buy from their own surplus. Thus, there is an economic incentive for China to keep cotton prices well above the 66 cents a pound that was being offered last fall.
The North Carolina grower says what the Chinese may or may not do isn’t a good way to write a business plan for a large farming operation.
Government support continues to dwindle for cotton farmers, and the lack of a farm bill is evidence that the U.S. Congress doesn’t have much sympathy for the plight of American farmers.
Unfortunately, that reality has only gotten worse since Murphy and many other North Carolina farmers decided to further cut cotton acreage last fall by planting wheat, destined to be double-cropped with soybeans this spring and summer.
Decision to replace cotton acres
“Last fall a lot of people, me included, made the decision to cut back on cotton and replace it with a wheat-soybean double-crop. At that time, cotton prices were in the mid-60s, wheat was $7.50 a bushel and soybeans pushing $15 per bushel.
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“To make those crops work in place of cotton, we had to go to a double-crop, and we had to make that decision in the fall, not at spring planting time,” Murphy says.
“Fortunately, cotton prices have rebounded some, and that’s good, because we’re still in the cotton business. We’re partners in a gin and we still plant about 1,000 acres of cotton, but you can’t overlook the realities of economics,” the North Carolina grower says.
Whether more growers will look at the recent recovery of cotton prices and plant a few more acres than forecast in the USDA Planting Intentions Survey isn’t clear.
David Parrish, CEO of the North Carolina Cotton Growers Association says from what he has learned from growers across the state, acreage is likely to stay at about the forecast levels for 2013.
Prices continue to recover some, but Parrish says cool, damp weather kept many growers out of the field during prime cotton planting time in the state. Most growers couldn’t take the chance of planting cotton past the insurance cutoff date for North Carolina, which is May 15, he adds.
"At this point I think we planted what we were anticipating to get planted. The cool damp weather was not good for cotton planting weather. One good thing is that we were anticipating a pull back from last year’s acres, and it looks like we will be able to get in the number of acres we were expecting,” Parrish says.
For many years, cotton and peanuts were the dominant crops in Murphy’s farming operation. Ironically, an unexpected buying frenzy by Chinese buyers helped bolster what appeared back in the winter to be a dismal outlook for peanuts.
Whether Chinese buyers influenced U.S. shellers to offer more lucrative contracts is not certain, but the improved outlook for peanut prices, despite a large domestic over-supply, did give North Carolina growers some flexibility in cropping decisions at planting time this year.
One factor for Murhpy to switch more heavily to grain crops was the availability of poultry litter for fertilizer. His family’s farming operation includes three large poultry houses, which can supply a portion of the fertilizer needed for his grain crops.
Doesn’t like litter on peanuts
“We don’t like to use litter on our peanuts, because we can get into zinc problems, but we’ve found that by bumping our pH up to the 6.2 to 6.4 range we can get by with 3 tons per acre of litter, followed by a top-dress with conventional nitrogen,” he says.
Recent tests at the University of Georgia, in which lime was used to overcome the negative effects of long-term application of chicken litter on fields, support the North Carolina growers thinking on using litter for peanuts, and to some extent cotton, too.
However, once soil test zinc gets above 70 pounds per acre, raising pH to 6.5 or slightly higher may not solve the problem.
Murphy has relied on veteran North Carolina Crop Consultant Billy McLawhorn for many years to keep him aware of fertility problems on the farm. “If we get too high on our zinc, Billy lets us know,” Murphy says.
The North Carolina grower says wheat has always been a good performer on the farm, so making the decision to plant several hundred acres last fall wasn’t difficult.
The high prices ($7.50 per bushel) last fall made it even easier, but to compete with cotton prices comparable to the past few years, he says it was necessary to plan a double-crop with soybeans.
They planted most of their wheat behind peanuts, which gave them a little later planting date than optimum. Murphy says in past years that combination had paid off in higher wheat yields than when wheat is planted behind cotton or grain crops.
And, they planted the wheat with a spreader, which allowed them to get the crop planted quickly.
“We started planting wheat on Nov. 1, when we put out litter. We ran an inline ripper to break the hardpan, and ran a coulter across the field one time to level the ground.
“Then, we spread the wheat with a conventional spreader and ran a minimum-tillage disk behind the planter to incorporate wheat into the soil,” Murphy says.
“Using that system, you can plant a lot of wheat in a short period of time,” he adds.
Murphy is among a number of North Carolina growers who planted a lot of wheat last fall. This year’s crop is expected be around 950,000 acres, but North Carolina Grain Growers Association President Dan Weathington says that number could be higher once all the grain is harvested.
North Carolina, like most Southeastern states is in a grain deficit situation and livestock producers are facing dire economic decisions, unless they can reduce the cost of buying and transporting grain feeds from the Midwest.
The willingness of grain buying companies in the Southeast to offer premium prices for locally grown grain, can make it economically enticing for growers to move toward grain crop production and away from more traditional cotton and peanuts.
Though their wheat crop looked great heading into harvest time and prices for both wheat and soybeans looked good, it’s still tough for long-time cotton growers like Audie Murphy to cut back on a crop that’s been so good for so long for so many farmers in the Tar Heel state.
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