In a year when much of the U.S. cotton crop got off to a rocky start and projections are that a year from now China will be sitting on three-fourths of the world’s cotton stocks, the potential for the price to go beyond 90 cents is “a challenge,” says O.A. Cleveland Jr., Mississippi State University Extension economics professor emeritus.

“Some analysts are saying cotton can go to 95 cents or $1 or more, but I just can’t see that as things stand now,” he said at the joint annual meeting of the Mississippi Boll Weevil Management Corp. and the Mississippi Farm Bureau Federation’s Cotton Policy Committee.

“I’m kinda stuck at 90 cents as a ceiling. Every time we’ve got up to 87 cents to 89 cents, demand has totally disappeared. I hope cotton will go to $1, but I just can’t see it.”

A year ago, Cleveland says, “Market analysts at a meeting I attended were saying cotton should be 60 cents to 65 cents, and I maintained it was at least 15 cents undervalued. China was taking cotton off the market, and those stocks weren’t available. Yes, that China cotton was a hammer hanging over our heads, but a lot of analysts weren’t taking into account how much they were paying for that cotton — basically $1.44 a pound — and they weren’t going to dump all that cotton. It took several months for cotton to get into my projected high 80-cent range, but it did.”

Currently, he says, “There is less and less quality cotton on the market. The USDA says there are 600,000 bales of certified stocks, and half that has been sold. U.S. high quality cotton is all but gone, and the market is going to come in and take that — it may have to be at 87 cents to 89 cents. If stocks are as tight as we understand, with three-quarters of it tied up in China, the non-Chinese free stocks are terribly low and are headed lower.”

The Chinese are continuing to use large amounts of cotton, Cleveland says, “and I think we’ll see that expand. We’re seeing the market gyrate a lot, going to 88 cents to 89 cents, then dropping back to 80 cents. What’s going on is that, when it falls below 83 cents the Chinese start buying. Then when it runs up to 87 cents to 89 cents, they step out of the market. This is basically telling us we’ve got an 82-cent to 89-cent range in which we can move cotton.”