GCC Disappointed by Inaction on Michael Relief

The Georgia Cotton Commission is disappointed by a lack of response to the aftermath left by Hurricane Michael from our partners in the federal government.  Over four months after the storm wreaked havoc to communities in southwest, central, and east Georgia, farms and agribusinesses are left with more questions than answers on federal assistance.

GCC Chairman Bart Davis, a cotton farmer from Colquitt County, said “it’s frustrating to meet with our leaders face to face and be promised assistance and nothing come in return,” noting that farmers across the state hope to start planting crops for 2019 in the coming weeks, and that financial institutions will be hesitant to provide operating loans to some without the promise of disaster assistance.

Georgia’s cotton crop has a farm gate value of roughly $1 billion and provides an economic impact significantly higher than that.  “Our small towns will continue to suffer if something doesn’t change.  The business that farmers provide communities by buying equipment, seed, and chemicals as well as paying employees are what send economic ripples through rural communities that everyone feels, and all of that is in danger,” Davis added.

“The simple fact of the matter is that current safety net procedures and crop insurance are not designed for severe losses such as the over $600 million that Hurricane Michael took from the 2018 Georgia cotton crop,” Davis continued.

Davis concluded by saying, “we thank our congressional leadership for what they have done to this point, but urge them and leaders in the executive branch to come together to help those affected by Hurricane Michael.”

Mike Tate to Lead the National Cotton Council in 2019

MEMPHIS, Tenn. – Mike Tate, a cotton producer from Huntsville, Ala., was elected National Cotton Council (NCC) chairman for 2019.

Named during the NCC’s 2019 annual meeting, held in San Antonio, Texas on February 8-10, Tate moves up from NCC vice chairman to succeed Ron Craft, a cotton producer from Plains, Texas.

A graduate of the NCC’s Cotton Leadership Program, Tate previously served as a NCC director and has served on numerous NCC committees. He served as a director and board advisor of the NCC’s export promotions arm, Cotton Council International, and has held multiple leadership positions in the NCC’s American Cotton Producers including as its chairman in 2016-17.

A past president of Southern Cotton Growers, Inc., Tate also has held leadership positions in Cotton Incorporated, the National Council of Farmer Cooperatives and many state agricultural organizations. He currently serves as a Staplcotn director.

Tate is the owner/manager of Tate Farms, a family-owned partnership in Meridianville, Ala., where cotton is the principal crop of the 6,000-acre Tennessee Valley operation. He also is president of Cotton Growers Cooperative Gin & Warehouse and has an interest in Tate Farms’ agri-tourism operation, “Cotton Picking Pumpkins.”

The recipient of numerous honors, Tate received the Cotton Grower Magazine’s Cotton Grower Achievement Award and Farm Press Publications’ High Cotton Award. A graduate of Alabama A&M University, he has a daughter and three grandchildren.

The NCC’s vice chairman for 2019 is Kent Fountain, a Surrency, Ga., ginner.

Elected as NCC vice presidents are Kirk Gilkey, ginner, Corcoran, Calif., and Ron Harkey, warehouser, Lubbock, Texas. Re-elected as vice presidents are: Robert Lacy, Jr, cottonseed processor, and Kevin Brinkley, marketing cooperative executive, both from Lubbock, Texas; Joe Nicosia, merchant, Cordova, Tenn.; and David Hastings, textile manufacturer, Mauldin, South Carolina. Re-elected as secretary-treasurer is Barry Evans, a producer from Kress, Texas.

NCC staff officers include: Dr. Gary Adams, NCC president and chief executive officer; Reece Langley, vice president, Washington Operations; Craig Brown, vice president, Producer Affairs; Dr. Jody Campiche, vice president, Economics and Policy Analysis; Dr. Bill Norman, vice president, Technical Services; Harrison Ashley, vice president, Ginner Services; John Gibson, vice president, Member Services; and Marjory Walker, vice president, Council Operations.

Ongoing Trade Tensions between the U.S. and China Creating Uncertainty in the World Economy and Global Cotton Market

MEMPHIS, Tenn. – National Cotton Council economists point to a few key factors that will shape the U.S. cotton industry’s 2019 economic outlook. This past year can be characterized as a year with significant uncertainty and volatility in the global economy and the world cotton market. For this outlook, the ultimate fate of the tariffs is a significant wildcard impacting the global market. Based on the positive statements resulting from the recent negotiations, the NCC assumes that the additional tariffs being imposed by the two countries will be removed in advance of the 2019 marketing year.

In her analysis of the NCC Annual Planting Intentions survey results, Campiche said the NCC projects 2019 U.S. cotton acreage to be 14.5 million acres, 2.9 percent more than 2018. However, it is important to note that although the survey results suggest a slight increase in acreage, the increase is largely the result of weaker competition from soybeans.

Overall abandonment is projected to be lower in 2019 because most regions currently have adequate moisture levels. With abandonment assumed at approximately 10 percent for the United States, Cotton Belt harvested area totals 13.0 million acres. Using an average 2019 U.S. yield per harvested acre of 840 pounds generates a cotton crop of 22.7 million bales, with 21.9 million upland bales and 782,000 extra-long staple bales. U.S. cottonseed production is projected to increase to 7.0 million tons in 2019.

Regarding domestic mill cotton use, the NCC is projecting a modest increase of U.S. mill use to 3.25 million bales in the 2019 crop year. As the single largest user of U.S. cotton, U.S. mills continue to be critically important to the health of the cotton industry. In the face of rising textile imports from Asian suppliers, the U.S. textile industry has focused on new investment and technology adoption in order to remain competitive.

Campiche noted that export markets continue to be U.S. raw fiber’s primary outlet. World trade is projected to be higher in the 2018 marketing year, but the trade tensions and increased competition from other major exporting countries has led to a decline in the U.S. trade share. Despite the decline, the U.S. will remain the largest exporter of cotton in 2018. U.S. exports are projected to reach 15.0 million bales in the 2018 marketing year.

Prior to the implementation of tariffs, the United States was in a prime position to capitalize on the increase in Chinese cotton imports. With the imposition of the 25.0 percent tariff, China has turned to other suppliers during the 2018 marketing year, allowing Brazil, Australia, and other countries to gain market share. Vietnam is currently the top export market for the 2018 crop year, followed by China and Mexico.

China is projected to consume 40.5 million bales in 2018. For the 2018 crop year, China is expected to import 7.5 million bales, which is 1.8 million bales higher than in 2017. The gap between China’s cotton consumption and production is currently around 13 million bales. From 2015-2018, the gap was filled with reserve sales and a small level of imports. The reserve stock level now is considered to be approaching a normal or maintainable level, and China is expected to increase imports in 2019.

Assuming a resolution to the U.S.-China trade dispute, China is expected to increase mill use in 2019 to 41.4 million bales. With a further reduction in stocks for the 2018 crop year, China’s imports are expected to increase in the 2019 crop year to 11.1 million bales. Chinese stocks are projected to fall by 4.2 million bales during the 2019 marketing year to 28.2 million bales. With a resolution to the U.S.-China trade dispute, the United States is expected to export more cotton to China in the 2019 marketing year and gain back some market share.

U.S. exports are projected to increase to 17.4 million bales in the 2019 marketing year. If realized, it would represent the 2nd highest level of U.S. exports, second only to the 2005 marketing year. When combined with U.S. mill use, total offtake falls short of expected production, and ending stocks are projected at 6.1 million bales. In absolute terms, stocks would be the highest since the end of the 2008 marketing year. A stocks-to-use ratio of 29.4 percent would be the highest since the 2015 marketing year.

Campiche said world production is estimated to increase by 7.0 million bales in 2019 to 125.5 million bales, which would be the highest level since the 2011 crop. World mill use is projected to increase to 126.5 million bales in 2019. Ending stocks are projected to decline by 1.3 million bales in the 2019 marketing year to 74.2 million bales, resulting in a stocks-to-use ratio of 58.7 percent. Stocks outside of China are projected to increase to a record level in 2019.

Based on the underlying assumptions and resulting cotton balance sheet, the level of stocks outside of China in the 2018 marketing year along with higher projected production in 2019 may contribute to a more bearish tone for cotton prices in the coming year. However, the increase in world trade due to higher Chinese imports along with a resolution to the U.S.-China trade dispute could provide some price support.

As with any projections into the future, there are uncertainties and unknowns that can change the outcome. For the coming year, a key factor affecting the U.S. cotton industry is the ongoing U.S.-China trade dispute and the 25 percent tariff on U.S. cotton imported into China.

Under a scenario with tariffs remaining in place, the projected expansion in world trade and the opportunity to backfill trade into other markets would allow U.S. exports in the 2019 marketing year to increase from 2018, but not to the extent as expected in the absence of tariffs. The longer-term imposition of tariffs also would dramatically increase the likelihood of permanent losses in market share in China.

Additional details of the 2019 Cotton Economic Outlook are on the NCC’s website at http://www.cotton.org/econ/reports/annual-outlook.cfm.

NCC Survey Suggests U.S. Producers to Plant 14.5 Million Acres of Cotton in 2019

MEMPHIS, Tenn. – U.S. cotton producers intend to plant 14.5 million cotton acres this spring, up 2.9 percent from 2018 (based on USDA’s December 2018 estimate), according to the National Cotton Council’s 38th Annual Early Season Planting Intentions Survey. (see table attached)

Upland cotton intentions are 14.2 million acres, up 2.8 percent from 2018, while extra-long staple (ELS) intentions of 264,000 acres represent a 6.3 percent increase. The survey results were announced today at the NCC’s 2019 Annual Meeting in San Antonio, Texas.

Dr. Jody Campiche, the NCC’s vice president, Economics & Policy Analysis, said, “Planted acreage is just one of the factors that will determine supplies of cotton and cottonseed. Ultimately, weather, insect pressures and agronomic conditions play a significant role in determining crop size.”

She said that with abandonment assumed at approximately 10 percent for the United States, Cotton Belt harvested area totals 13.0 million acres. Using an average U.S. yield per harvested acre of 840 pounds generates a cotton crop of 22.7 million bales, with 21.9 million upland bales and 782,000 ELS bales.

The NCC questionnaire, mailed in mid-December 2018 to producers across the 17-state Cotton Belt, asked producers for the number of acres devoted to cotton and other crops in 2018 and the acres planned for the coming season. Survey responses were collected through mid-January.

Campiche noted, “History has shown that U.S. farmers respond to relative prices when making planting decisions. The cotton-to-corn price ratio is lower than in 2018 due to higher corn prices as compared to last year. The cotton-to-soybean price ratio is higher than in 2018 due to lower soybean prices. A price ratio increase generally indicates an increase in cotton acreage.

“For the 2019 crop year, many producers have indicated a desire to reduce soybean acres due to low returns in 2018. As a result, corn is expected to provide the strongest competition for cotton acres in 2019.”

Southeast respondents indicate a 2.6 percent increase in the region’s upland area to 2.8 million acres. All states except North Carolina and Virginia show a decline in acreage. In Alabama, the survey responses indicate 0.6 percent less cotton acreage as well as a reduction in corn, wheat, soybeans, and ‘other crops’. In Florida, respondents indicated less cotton ‘other crops’, likely peanuts. In Georgia, cotton acreage is expected to decline by 3.6 percent. Georgia growers expect to plant more corn and ‘other crops’, likely peanuts. In North Carolina, a 0.1 percent increase is expected.  Acreage of corn and ‘other crops’ is expected to increase in North Carolina, while soybean and wheat acreage is expected to decline. In South Carolina, cotton acreage is expected to decline by 5.4 percent, while corn and soybean acreage is expected to increase. Cotton acreage is expected to increase by 3.5 percent in Virginia as acreage moves away from soybeans and ‘other crops’.

In the Mid-South, growers have demonstrated their ability to adjust acreage based on market signals. The relative prices and potential returns of competing crops play a significant role in cotton acreage. Mid-South growers intend to plant 2.3 million acres, an increase of 13.6 percent from the previous year as some land is shifted away from soybeans. Across the region, all states intend to increase cotton acreage. Arkansas producers intend to plant 14.4 percent more cotton acreage and reduce soybeans and ‘other crops’. They also expect to increase corn acreage. The largest percentage increase was reported by Louisiana producers who expect to plant 22.2 percent more cotton acreage in 2019 and less corn and soybeans. In Mississippi, cotton acreage is expected to increase by 18.4 percent and plant less soybeans and ‘other crops’. Missouri growers expect to increase cotton acres by 6.9 percent and plant less soybeans. In Tennessee, cotton acreage is expected to increase by 5.9 percent as land shifts away from soybeans and wheat. All states in the Mid-South expect to plant less soybeans in 2019.

Southwest growers intend to plant 8.8 million cotton acres, a 2.2 percent increase. Increases in cotton area are expected in each of the region’s three states. In Kansas, producers intend to plant 3.4 percent more cotton acres along with more wheat and less ‘other crops’, likely sorghum. In Oklahoma, a 1.0 percent increase in cotton acreage is expected. Oklahoma growers also plan to increase acreage of wheat and ‘other crops’. Texas acreage is expected to increase by 2.3 percent.

Far West producers are expecting to plant 86,000 upland cotton acres – a 2.9 percent increase from 2018. Cotton acreage is expected to increase in Arizona and California and decrease in New Mexico. Results for Arizona suggest a 1.0 percent increase in upland cotton acres and a decrease in all other crops. In California, growers intend to plant 14.4 percent more upland cotton acres and more ELS cotton and wheat.

Many producers will continue to face difficult economic conditions in 2019. Production costs remain high, and unless producers have good yields, current prices may not be enough to cover all production expenses. Despite these challenges, cotton is still the better alternative for many growers. Based on current prices, projected cotton returns are currently more favorable than some competing commodities. Improved seed varieties continue to increase yield potential and improve cotton’s profitability. In the West, expected water availability may be influencing cotton acreage decisions.

NCC delegates were reminded the expectations are a snapshot of intentions based on market conditions at survey time with actual plantings influenced by changing market conditions/weather.

# # #

 

Prospective 2019 U.S. Cotton Area

  2018 Actual (Thou.)  1/  2019 Intended (Thou.)  2/ Percent Change
SOUTHEAST 2,886  2,812  -2.6% 
  Alabama 510 507 -0.6%
  Florida 118 111 -6.1%
  Georgia 1,430 1,379 -3.6%
  North Carolina 430 430 0.1%
  South Carolina 300 284 -5.4%
  Virginia 98 101 3.5%
MID-SOUTH 1,985  2,256  13.6% 
  Arkansas 485 555 14.4%
  Louisiana 195 238 22.2%
  Mississippi 620 734 18.4%
  Missouri 325 347 6.9%
  Tennessee 360 381 5.9%
SOUTHWEST 8,645  8,833  2.2% 
  Kansas 165 171 3.4%
  Oklahoma 780 788 1.0%
  Texas 7,700 7,874 2.3%
WEST 278  286  2.9% 
  Arizona 150 151 1.0%
  California 50 57 14.4%
  New Mexico 78 78 -0.6%
TOTAL UPLAND 13,794  14,186  2.8% 
TOTAL ELS 248  264  6.3% 
  Arizona 14 11 -19.9%
  California 210 230 9.7%
  New Mexico 7 7 -1.4%
  Texas 17 15 -10.0%
ALL COTTON 14,042  14,450  2.9% 
       
1/ USDA-NASS December Estimate
2/ National Cotton Council

2018 Georgia Quality Cotton Award Winners Announced

The 2018 Georgia Quality Cotton Awards were presented at the Georgia Cotton Commission’s 12th Annual Meeting and UGA Cotton Production Workshop on January 30, 2019 in Tifton, GA. The awards are co-sponsored by the Georgia Cotton Commission and BASF, and administered by the University of Georgia Cotton Team.

The purpose of the awards are to recognize producers and ginners of high-quality cotton fiber and to identify their general management practices for the benefit of other growers. The producers and their gins received a plaque and the winning producers received a $500 cash award. The UGA County Extension Agent for each winner was also recognized as they work closely with the farmers during the growing season.

The awards are given in each of these three cotton acreage categories: 1) less than 500 acres, 2) 500 to 1,000 acres, and 3) greater than 1,000 acres within the four regions of the state. Winners in these categories are determined by the loan value and premiums of their cotton. The winners’ excellent achievements are due largely to their management practices and expertise. The sponsors of this program congratulate all of the following winners:

Region 1

  • Less than 500 acres
    • Grower – Robert Rawlins, Turner County
    • Ginner – Sconyers Gin and Warehouse, Sycamore
    • UGA Extension Agent – Will Gay
  • 500-1000 acres
    • Grower – Chad Hawkins, Wilcox County
    • Ginner – Arabi Gin Company
    • UGA Extension Agent – Andrew Sawyer
  • 1000+ acres
    • Grower – Lancaster Farms, Pulaski County
    • Ginner – Heart of Georgia Peanut & Gin, Hawkinsville
    • UGA Extension Agent – Jay Porter

Region 2

  • Less than 500 acres
    • Grower – Tucker Cobb, Washington County
    • Ginner – Midville Warehouse, Inc.
    • UGA Extension Agent – Brent Allen
  • 500-1000 acres
    • Grower – Ed Wilson Farms, Jenkins County
    • Ginner – Midville Warehouse, Inc.
    • UGA Extension Agent – Jason Mallard
  • 1000+ acres
    • Grower – Dean Johnson
    • Ginner – Bryant’s Gin, Bartow
    • UGA Extension Agents – Katie Burch and Pamela Sapp

Region 3

  • Less than 500 acres
    • Grower – Mike Lindsey, Cook County
    • Ginner – BCT Gin Co., Inc., Quitman
    • UGA Extension Agent – Tucker Price
  • 500-1000 acres
    • Grower – Branch and Branch Farms, Tift County
    • Ginner – Omega Gin Company
    • UGA Extension Agents – Scott Carlson and Justin Hand
  • 1000+ acres
    • Grower – Michael York, Brooks County
    • Ginner – BCT Gin Co., Inc., Quitman
    • UGA Extension Agents – Stephanie Hollifiend and Michasia Dowdy

Region 4

  • Less than 500 acres
    • Grower – Clifford Dollar, III, Decatur County
    • Ginner – Sowega Cotton Gin & Warehouse, LLC, Climax
    • UGA Extension Agent – Nan Bostick
  • 500-1000 acres
    • Grower – Andy Spooner, Seminole County
    • Ginner – Clover Leaf Gin, Donalsonville
    • UGA Extension Agent – Cody Powell
  • 1000+ acres
    • Grower – RBF & M+S Roberts Farms, LLC, Worth County
    • Ginner – Worth Gin, Sylvester
    • UGA Extension Agent – Bryce Sutherland

The final award given was the overall Best Cotton Award. This was awarded to the Georgia cotton producer with highest loan value and premium. The 2017 Best Cotton Award went to Mike Lindsey with a loan value of 56.14 cents/lb and a premium of 4.14 cents/lb.

For a full photo album of the winners, visit our Facebook page at www.facebook.com/GeorgiaCottonCommission.