Reward cotton quality efforts If cotton producers and breeders are going to reverse the decline in cotton quality seen over the last few years, they're going to need some incentive from textile mills, according to Gilliam, La., cotton producer Dan Logan.
Logan, participating in a panel discussion at the 2001 Beltwide Cotton Conferences in Anaheim, noted that textile mills "want nothing below 34 in length and this is one of our biggest variables."
"They want at least 27 strength, 80 percent uniformity, 3.7 to 4.2 micronaire, 41 grade and no neps. They say they will trade more leaf for less cleaning, but we'll have to see about this. The big question for producers is, `How can we consistently produce these qualities?' The answer is really getting hard and complicated."
One answer is improved genetics, Logan said. "Producers all over the Cotton Belt are concerned about this apparent narrow genetic base in our cotton varieties and are unified in their efforts to get more dependable traits in their cotton varieties. They're willing to put up money and to work to help alleviate this lack of consistency."
Doing so will require some assistance from "companies like Monsanto and Dow, who have scientists working on isolating specific gene traits. They may have several genes isolated which will greatly improve the quality of cotton, but they are not using these genes until they can figure out how to charge for them."
Therein lies the problem, according to Logan. "If the producer bought the new seed, the length was all 36 and better, would we get paid enough to justify the cost of the seed?"
And if mills do pay more for certain qualities, how long will their commitment last?
"One of the big complaints that we producers always have is once a quality trait is introduced, it quickly becomes a standard and anything less is a discount. Producers only gain from new varieties if they can increase yield or lower cost of production. Better quality characteristics help for a short period of time, but it soon becomes expected. We have lots of discounts and not many premiums.
"Surely, the cotton industry can figure this out," Logan said. "Clearly, the mills need better quality, more consistent quality and the producers want to produce better quality. They just want to get paid for it."
Producing quality cotton can have a significant marketing benefit for Logan. "For many years, our small 8,000- to 10,000-bale gin sold gin direct (bypassing a shipper). We had a good reputation for quality cotton and got it picked and ginned early. We had only five or six growers and they worked together to produce good, clean quality cotton. We would sell the basis and each producer would call his own price.
"Our gin liked the mill direct route because we didn't have storage and interest. We can sell the basis and fix the price at any time during the course of the crop year of up to 75 percent of our expected production."
But as predictable quality has declined in recent years, Logan has relied less and less on the mill direct option.
Logan still believes that mill direct has some possibilities once the cotton industry gets its quality problems straightened out. But he advised growers to be careful.
"We had a bad experience in 1996 which caused many farmers in my area to shy away from gin direct. I advise any producer who is considering a gin direct contract to check the finances of the respective purchaser very carefully and to get some money as soon as you can.
"Don't be discouraged if your deal fall through after one or two years. One of the parties will want to make a change and the other won't want to do it. Don't look on this as a failure, just keep your eyes open for another opportunity."
Logan notes that marketing a crop is an often under-appreciated avenue for cotton producers. He advised growers to follow a few simple rules.
"You need to know how much it costs to sell your cotton. Another way to ask the same question is, `How much do you gain net for your cotton.' The only way for the grower to know for sure is to add all the income from growing cotton and divide it by the pounds of cotton produced. Then he's arrived at price per pound. This should include warehouse rebates, gin rebates, hauling rebates and all cotton-related income.
"In my opinion, any producer who decides to market his own crop should have someone who is knowledgeable about cotton sales to discuss his potential trade with. This person could be a market advisor, a knowledgeable producer, a country buyer or a merchant who the producer knows and feels comfortable with.
"It helps me to discuss potential trade with a third party. They might see something that I don't see and might not be aware of. I use John Bondurant in Memphis. I subscribe to his market comments. I'm able to call John and discuss cotton marketing in general and then run some ideas by him. It helps me to discuss several options before settling on a deal."