Planting season is just few months away, December 2009 cotton futures prices are hovering around 90 cents a pound and cottonseed, soybean, corn and wheat prices are at record levels — no wonder Mid-South farmers are giddy with excitement.
But fertilizer, fuel, chemical and seed costs are going up too, a recession looms and shortages of soybean seed and storage are factors to consider when deciding what to plant. Here's what producers interviewed at the Mid-South Farm and Gin Show had to say about the upcoming season.
“I've never seen anything like it,” said Talton Graves when asked about high commodity prices. “But there's an old saying that the best cure for high prices is high prices.”
Graves raises 280 head of beef cattle and produces 1,000 acres of cotton and 1,000 acres of soybeans near Humboldt, Tenn. He's increased his soybean acreage over the last several years, primarily due to good prices for beans.
“But there's another old saying, ‘You can pay the bills with grain, but you buy farms with cotton.’
Continually rising cotton input costs concern Graves. “I have some big worries about phosphate, potash and ammonium nitrate (prices).
“One hammer is not going to bring the house down. But they keep raising prices for fertilizer, all the chemicals, seed and technology fees that work less and less every year. It all adds up.
“And chemicals are produced with oil or oil by-products.”
Graves says higher glyphosate prices are also a concern, but he incorporates several products in his weed control program, including Vision, glyphosate, Valor and Cotoran under the hood and post-directed. “I found out that if you get the weeds very early, you have good control. I've had real good luck rotating chemicals to eliminate weed problems.”
Graves says a reported shortage of soybean seed may also dictate his crop mix for 2008. “Usually, I have ground that I like to rotate from one crop to another, and if the price of one crop looks like it's going to favor another, my acres will drift in that direction.”
Joe Bostick, of Golden, Miss., visiting the gin show with his son, Ryan and Ryan's wife, Jessica, said his 2007 cotton crop made about 750 pounds per acre, despite extremely dry weather in northeast Mississippi during most of the season.
This season, about two-thirds of Bostick's land will be in soybeans to take advantage of high prices. Bostick, a former High Cotton Award winner from the Delta, started locking in prices at the elevator at about $9 and now has about one-third of his beans priced. “Now all we need to do is get a good yield.”
Burlison, Tenn., cotton producer Brad Williams will plant 18,500 acres of cotton this year, the same acreage as last year. “If you look at $300 a ton cottonseed, it's very attractive on the gin side. Plus, we don't own a combine or any kind of infrastructure for grain. We grow cotton. It's been our bread and butter, and we're going to stick with it. We believe in the theory that you stay with the one you took to the dance.”
On higher input costs, Williams noted, “Everybody is getting in line to get their piece of the pie with the increasing commodity prices. The 45 percent increase for glyphosate is way out of line. It's ruffled a lot of feathers for a lot of farmers who feel like they've been taken advantage of.”
Alamo, Tenn., cotton producer Jimmy Hargett hasn't figured out his crop mix for 2008, but has locked in solid prices for corn, cotton and soybeans and most of his wheat.
“Today, we have 80-cent cotton, $5 corn, $13 soybeans and $10 wheat. This is the first time in my 47 years growing crops that
all four commodities have gone up at the same time.”
Hargett is probably one of a handful of producers still holding last year's cotton crop. “I'm being very foolish trying and get another 3 to 4 cents a pound. I probably could put 85 cents a pound in my cotton pocket today counting cottonseed. I'm gambling trying to make $15 on one end against losing $175 on the other end. That's not a good gamble. But I'm scared to gamble any further. I might do something in the next few days.
“A long time ago, I had 100 bales of cotton that I was holding because I thought it was going to a dollar a pound. I was offered 85 cents for it. Then it started down, and I finally got out at 65 cents. A friend of mine got out at 32 cents and had to pay a year's storage. A lot of people aren't old enough to see a downward side.”
When asked how much cotton he had booked, Dundee, Miss., cotton producer and former Delta High Cotton award winner Justin Cariker replied, “Too much. We booked 3,500 bales a couple of weeks ago and we're going to net 83 cents for that, and we thought we were setting the world on fire. And now the price has just gone crazy.”
Cariker says he'll book another 1,000 bales of cotton, “and if I hadn't already booked 50,000 bushels of corn, we'd be planting even more cotton.”
Cariker says the high cost of diesel is another reason to consider cotton over corn. “I'm afraid when we start hauling our corn out of the field, the costs for hauling could increase. You could have $54 an acre just in trucking expense. When you're building modules, you don't have that expense. Once you harvest the crop, you're pretty much done.”