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Mid-South farmers and ginners are coping with “unprecedented times” as they try and adjust business models to high commodity prices, higher production/operating costs, and changing demands for crops, says David Blakemore, Campbell, Mo., producer/ginner/warehouseman.
Greater reluctance to return to cotton
“The changes in Mid-South agriculture in the last five years have been more severe than anything I could ever have imagined in my farming career,” Marianna, Ark., farmer/ginner Larry McClendon said in the panel discussion.
The monumental shifts to grains have also brought changes in operational lifestyles, he says.
“Because of higher costs and greater risks, there is a real reluctance of many farmers to get back into cotton after growing grains. Growing grains is easier, with less management and less financial risk — production cost increases for cotton have been pretty dramatic.
“I don’t think we will ever regain all the cotton acres we had a few years back. It’s just too expensive for a farmer to flip-flop between grains and cotton.”
In the process of losing cotton acres in recent years, McClendon says, “We’ve also lost personnel, and demand for services and facilities has changed. In the past, most grain farmers relied on community elevators; now, many of them have their own on-farm storage facilities. Continuing consolidation and closings have resulted in fewer community gins and more centralized facilities.”
Mills in the eastern U.S. once consumed 80 percent of the nation’s cotton, with about 20 percent exported, he notes.
“Now, that situation is reversed. When I first started farming, my competition was cotton producers in other areas of the U.S. cotton belt. Then, as cotton spinning shifted to overseas mills, my competition was foreign cotton growers. Now, my competition is soybeans and corn.”
In the Mid-South, McClendon says, “I think we will see farms continue to get much larger. We’ll see a continuing reduction in government farm supports, and as a consequence forward pricing will be a mainstay of management. Acreages from year to year will be very volatile and highly contingent on price.”
The acreages of individual farms will increasingly be tied to harvest capacity, he says.
“With each revolution in picker/moduling systems, we’ve almost doubled our harvesting capacity. When a grower is investing half a million dollars in a new moduling picker, he has to be sure he can utilize that machine as efficiently as possible, and he will more and more center his operations around what he can harvest. Technology will increasingly be a key component of farming operations, and in everything, we’re in for a lot faster ride than ever before.”
With increasing costs of production, land, rents, and equipment, McClendon says, “It will be increasingly challenging to farmers to finance their crops, with more collateral required and tighter lending limits. With higher costs and higher capitalization requirements, it will be more difficult for younger farmers to get into the business and for older farmers to facilitate the transition to the next generation.
“If somebody’s got enough money to start in cotton farming, they’ve got enough money to quit.”