Everyone has heard the phrase “preaching to the choir” and how there is no need to do that. Well, in agriculture, sometimes preaching to the choir is helpful when discussing very specific topics. For example, we are the Georgia Cotton Commission and we are very verse in the cotton industry. To an outsider (non-ag person) they might think that just because I know about cotton then I should know about peanuts, corn, soybeans, etc. because these crops too. Or I might even get asked a question about the cattle industry or dairy policy. To a non-ag person it just makes sense that someone who works in agriculture should know about agriculture. What non-ag folks (and usually the general public) don’t know is that agriculture is extremely diverse and different between commodities and different regions of the country. Therefore, sometimes it is actually a good idea to “preach to the choir” and share your ag story and knowledge with other ag people.
Case in point, I really enjoyed speaking to Sigma Alpha at ABAC this week. Sigma Alpha is a professional agricultural sorority. All of the members either are majoring in ag or have some ag background. I explained the history of cotton in Georgia (see previous blog posts), the current industry, and some future concerns. The group had some really good questions and we had good discussions on various things from the Farm Bill to cotton products. When I left, I realized that we all can and should all learn from each other in agriculture. This is especially important since agriculture is constantly under attack in the media and from quasi-knowledgeable people around the country. It is everyone’s duty to stay informed and to inform others about Georgia’s largest industry and the industry that is the backbone of the American economy.
Cotton harvest is now in full swing across most of the 91 Georgia counties that grow cotton. The weather has been perfect for about the last week and a half for harvest, and it appears like most of this coming week will be great weather as well. Yield numbers are still all over the board. I haven’t talked with a single person who has seen consistent yields across all of their farms. As most folks already know, dryland yields this year in most of South GA are lower than normal, and irrigated yields are average to excellent. Boll rot and boll lock have shown up in some fields from the two weeks of wet weather that moved in just as harvest was beginning. Overall it seems like the crop looks pretty good and we will keep our fingers crossed that a late hurricane/tropical storm doesn’t arrived in November or December.
Harvest season is a stressful time of year. Everyone sees the gin trucks running up and down the roads around the clock now, and folks still picking cotton at 9, 10, or even later into the night. Stressful farmers are also trying to move massive amounts of equipment on small rural road as harvest moves from farm to farm. Unfortunately during this busy time of year we always hear about accidents on the farm. Sometimes these are in the field with a picker catching fire, or a tractor mowing stalks catches fire like what happened this week in Terrell County. Other times there are accidents on the roads involving equipment and passenger vehicles. Recently the Governor’s Office of Highway Safety and the Georgia Department of Agriculture teamed up to help bring awareness to this situation. They reported that there were 462 farm equipment related collisions last year in GA. Of those, there were 169 injuries and 10 fatalities. We would like to reiterate that it is everyone’s duty to keep safe during harvest season. If you are moving equipment on the highway make sure you have properly marked all equipment with slow moving vehicle triangles and that you are extra cautious when moving equipment that is wider than a single traffic lane. Please remind your neighbors, family, church friends, gas station attendants, pizza delivery person, and everyone else you know to slow down during harvest time. All too often farm equipment collisions are avoidable if people would pay attention and approach slow moving equipment with caution.
Good luck and be safe this harvest season.
A cotton field ready for harvest in Brooks County, GA.
A module truck unloads round modules at B.C.T. Gin in Berlin, GA.
The 2014 Sunbelt Ag Expo was this week. And as expected it rained heavily on Tuesday, causing a less than stellar crowd. Wednesday was great, and I don’t have the numbers but I’ll bet Wednesday was an above average day for the Expo. Thursday’s crowd was about normal. The Expo is always a great event to participate in and a great venue to meet and discuss current cotton topics with farmers and consumers.
Although Tuesday’s rain made for a tough day, we were happy to have several visitors stop by. Wednesday was more fruitful. I had the chance to speak with several Southeastern cotton farmers and the story is still about the same: dryland yields are below average and irrigated yields are average or above average with some boll rot in both. This has been the story ever since harvest has started across Georgia with many folks suffering several showers that were too little too late for this year’s cotton crop. Regardless of how anyone’s crop is doing, everyone agreed that prices are nothing to get excited about. Cotton futures and spot prices continue to hang at levels that most consider are below production cost, meaning that you will take a loss selling into this market.
One great positive that we saw at the Expo were kids and their parents enjoying our new face board. If you are not familiar with a face board, see the picture below (for more face board pictures visit our Facebook page). Basically the painted face board is a way to engage folks who are not farmers by letting them interact in a fun way with cotton. Many face boards have popped up over the last year at fairs and various other ag events, one for strawberries, a dairy cow board, a Georgia Grown board, etc. It was very exciting to see non-cotton farming folk wanting to get their picture taken “In High Cotton at the Sunbelt Ag Expo.”
This year the Georgia National Fair celebrates its 25th anniversary. The Georgia Cotton Commission has been a proud supporter of the GA National Fair throughout the years as we believe it is vital to support educating our youth about agriculture. The Fair host many livestock shows, beef exhibits, and dairy exhibits. Due to its size constraints, it’s hard to show people any crops as they browse about the fairgrounds. Enter the new exhibit in the Georgia Grown Building, “The Seasons and Faces of Georgia Agriculture”. This exhibit is in its first year with the main purpose of teaching both youth and adults about agriculture in Georgia, particularly those things that they don’t normally see at the fair, such as cotton fields and farming equipment. We participated in this exhibit this year as we felt that it is vital for the general public in Georgia to understand how important cotton is to the state, after all, we do grown 3 times more cotton than any other crop in Georgia. Below are a few pictures from the exhibit.
Also this week, we had the pleasure of helping educate both youth and adults at Leadership Bulloch’s Ag Day. The leadership class consisted of both and adult group as well as a group of high school juniors. Not a single person in the group worked in agriculture, so my colleagues (Georgia Farm Bureau, Georgia Agribusiness Council, and UGA Cooperative Extension) and I had a clean slate to work with in regards to educating the group about ag and how important it is to Bulloch County and the state of Georgia. Our round-table discussion with the group lasted well over an hour. We were also fortunate enough to get a personal tour from employees at Southern States Cotton Gin in Bulloch County. I could tell the leadership class participants were amazed at the process and they had tons of questions, which showed me that they were truly interested and wanted to learn. Below are a few pictures from the event.
Elliot Marsh with Southern States discusses the cotton industry with the Leadership Bulloch class.
Jason Mendoza with Southern States explains the gin yard to the group.
The last two weeks have seen several reports about China’s new cotton policy. While these reports aren’t really reporting anything new, it still put some downward pressure on price over the last two weeks. First it is important to understand how we got to a situation where everyone is waiting to see what the Chinese policy will be.
The easiest way to understand Chinese agricultural policy, and Chinese development in general is to look back in American history about 30 or 40 years. China implemented a cotton buying and storage program in 2011 that is not unlike the US grain buying and storing program of the 1970s. Most ag economist agree that the US program was not effective in the long run and the US has not had a grain storage program since. Yet the Chinese implemented a similar program in 2011. Basically China set a cotton price that they thought would keep their farmers profitable. If the farmer couldn’t sell their cotton at that price the Chinese government would pay the farmer the target price and take ownership of the cotton, essentially becoming a cotton buyer. The promised target price was about $1.40/lb. I think US prices at that time were around $0.80/lb. Essentially China bought all of the cotton it’s farmers produced and started stockpiling it in warehouses, much like the US grain program in the 1970s. If Chinese textile mills, which are not government owned, wanted to buy Chinese cotton, they had to buy it from the government stockpiles at the roughly $1.40/lb rate. Since no Chinese farmer would sell to Chinese mills at the world price of around $0.80/lb, then the Chinese mills started to import more cotton. This is about the time period that world prices starting going up to almost ridiculously crazy levels (over 3 times the current price). Since China is the largest producer and consumer of cotton, once you take the production out of the picture, this created a huge new demand, and thereby driving up prices, for cotton imported to China. Even with Chinese mills paying import fees and tariffs, they were still getting it cheaper than they could from the government.
Georgia cotton farmers really enjoyed these times of high prices over the last few years, even if they were artificially inflated prices. Then early this year (2014) China announced that it was doing away with its buying and storing program and shifting to a straight target price deficiency payment system. Again, this is similar to the change the US made to farm programs in the mid 1980s. Basically China sets a target price and if a Chinese cotton farmer doesn’t sell it for that price the government pays the difference. This is less trade distorting since the cotton actually stays on the market, but with a high target price, somewhere around still around $1.20-$1.40, this will spur over production in China, thus driving world price down. Then there were reports in the spring that China would only subsidize farming in the western growing region of Xinjiang. This seemed to make since as a policy move because Xinjiang is less populated and is one of the few areas in China where mechanized production is a possibility. Also reports were that this move was to help boost grain production to feed more people and livestock in the eastern part of the country. But these were just reports. The market moved down on these reports but there was some hope of it coming up because most people thought that the shift in cotton acreage to western China would decrease their overall cotton acres. But then just in the last two weeks we have seen conflicting reports about the China implementing cotton target price programs in eastern regions too. And of course this sent the market down to new 5 year lows.
So the next hope is that the Chinese government will actually come up with some concrete plans and release this information to the public. Right now it seems like most folks are just waiting to see what happens in China to see how they want to buy or sell cotton. Our hope is that we can soon return to a market that is driven by market signals and not by government policy. It may have taken us in the US a few years to get this right, but I’d encourage the Chinese to take a more revenue approach, similar to the US, to both support their farmers when times are bad but also allow the free market to work properly.