Cotton Links


A Resilient Industry

By Tim Price
Memphis, Tenn.

You have likely heard the statement that the cotton industry is at its best during a crisis. Well, I always believed that statement, but it was not until recently that I fully appreciated it.

After I participated in  the Southern Cotton Ginners Association’s summer meeting in July, I became even more convinced about how our industry will survive these latest challenges.

Nobody needs to list all of the things that U.S. cotton is facing these days. Fewer acres, volatile prices, global recession, WTO negotiations and high input prices are just some of our challenging issues.

However, the ginning sector is doing its part to  adjust to this new environment. In fact, we’re doing more than adjusting. We are trying to study and explore opportunities so that we’ll be ready to take advantage when those cotton acres do return.

I’ll be the first to admit that there were significant cotton acreage decreases in the Mid-South. And the increase in corn and soybean acres was something to behold. But I am also seeing other things at work in the market that encourage me.

As an industry, we know that cotton has had its ups and downs, and we’ve seen our share of volatility with acreage shifts. However, the cotton industry has a steady and exemplary history of both practical and strategic research and promotion. This research spans private industry, land grant universities, USDA and the unique success of Cotton Incorporated. Even when we were producing 21 or 22 million bales each year, our industry was preparing for change because we knew we wouldn’t harvest big crops every year.

A critical element in cotton’s future is the necessity of good marketing practices. We must take better advantage of multi-year, forward marketing plans, including both lint and cottonseed.

We’ve done a good job of understanding the quality of cotton lint demanded globally. But we need to better understand how to maximize the total value from an acre of cotton, including the value of cottonseed and byproducts.

So where does this leave the ginning sector? Well, I can say for sure that our ginners want to process cotton, and they are doing everything in their power to remain viable. In fact, the number of gins actually closing is far less – proportionately speaking – than the number of acres decreasing. Why is this happening? First, our ginners are committed to cotton. Second, they want to stay in business and be ready when cotton acres return. Third, they are anticipating cotton’s comeback.

Because of these principles affecting the future of cotton, the Southern Cotton Ginners Association recently asked the LSU AgCenter to conduct a vital study on acreage shifts, ginning capacity and strategic positioning within the ginning sector. Among many findings, we discovered that cotton generates nearly three times its direct economic activity in local communities.

The study also talks about the need for looking at all ginning costs and understanding the relationship between investments and expenditures. It will also help us identify gaps in ginning capacity from recent gin closures where cotton has been historically grown. I’m glad the LSU AgCenter did this study because it has led to the Southern Cotton Ginners eventually receiving a $69,000 grant from USDA-AMS to continue studying the “change and strategic positioning of the industry.”

In summary, it’s obvious that our industry is resilient and ready to meet any challenge – including the ones we face now. As you’ve heard other industry officials report in this space, cotton is not disappearing from the landscape.

This industry is too valuable to take for granted. For that reason, I can confidently say that we’ll never become complacent. We have many opportunities awaiting us. Let’s take advantage of them.

– Tim Price, Memphis, Tenn.

Return To Top