I would tell cotton farmers not to be too quick to jump ship. If they can hold on for a little while longer, there will be a trend toward increased cotton acreage. I think the key is remaining flexible and keeping those cotton acres stable while dealing with these other acreage shifts. The market will dictate how big the acreage will be in each of these crops. That is what will influence planting intentions and marketing decisions. Plus, we have a lot of expense in our cotton infrastructure.
My advice is don’t give up on cotton. This crop is coming back. There are hidden factors a farmer needs to think about if he’s considering a switch to another crop. I realize that things aren’t very profitable right now, but cotton is what got us to this point. I feel confident that, in the long run, cotton is what will keep us there. I’ve talked to some buyers and the long-range price trend also looks good.
The bottom line is the economic situation. Make plans and investigate every option. That’s how you have to approach the overall situation in a farming operation. It takes a lot of effort to study how a farm will cash-flow and come up with the best approach. But if you want to survive in today’s environment, you have to be a smart businessman. In the long run, I think cotton will bounce back because we’ve seen it happen before. Back in 1995, we saw a pretty big shift into corn. But those acres came back to cotton. We’ve seen this happen before. That’s why cotton will be back.
My answer might be a little different from other folks. Based on what happened out here in Texas in 2007, I’d say don’t give up on a crop. Our weather improved later in the summer and fall. The end result was an amazing turnaround and a really good crop. Sometimes you just have to hang in there. If prices improve and world demand continues, I see reason for optimism.
I’d say that if you’re
in the cotton business, don’t get out. Stay in it. The day is
coming when we’ll want to raise a lot more cotton, and we’ll
need those acres. We don’t need to lose any of our infrastructure,
and if we lose too many cotton gins, those acres might not be back.
We need to hang in there somehow. The price outlook is good for cotton,
and, frankly, I think some of these corn acres will return to cotton
in three or four years, and maybe even sooner than that. That’s
why I think we’re on the road back. Don’t forget that we’ve
seen trends like this before when we lost acreage. But ultimately it
turned around, and I think that’s what will happen again.