Writer: Joe Bryant,(806)746-6101
Contact: Kater Hake, (806) 746-6101
LUBBOCK — Cotton growers on the Texas South Plains, an area that annually produces about half the state’s cotton and 20 percent to 25 percent of the nation’s crop, are rapidly winding up an unusual season with a more usual scenario: Good news-bad news. For many, the emphasis is on the good news: Mills are paying top prices for the lint, as high as 65 to 75 cents a pound.
Despite a long, dry summer with rainfall well below normal, which devastated 1 million of the 3 million cotton acres in the 25-county area, the fields that survived are yielding an estimated 2.7 to 2.8 million bales, said Kater Hake, cotton agronomist here with the Texas Agricultural Extension Service. Last year the 25 counties produced 3.45 million bales on 3.1 million harvested acres.
The quality of last year’s crop was very high, and this year’s quality is equally as good, Hake said.
“But the price from the mill is about 10 cents a pound higher than last year,” the agronomist said. “Last year, most growers’ top receipt was about 60 cents.”
Although many South Plains growers are receiving top price for their cotton this year, there is another side to the coin, says Dr. Jackie Smith, professor and agricultural economist with the Extension Service at Lubbock.
“This may be our highest gross return on our cotton, but we haven’t had a more expensive crop to produce, either,” Smith said. The long summer drought wiped out much of the dryland crop and meant high irrigation costs for farmers who could water their fields, he said.
Many area growers sell their cotton through the Plains Cotton Cooperative Association (PCCA) pool, which pays a seasonal average price.
“These growers may not be getting the season’s highest price, but today’s market is improving their seasonal average,” Smith said.
He noted that, year in and year out, growers in the pool feel they benefit from it. Some growers entered cash contracts earlier in the season which, while bringing a good return, won’t equal the current price.
“Many of our growers are in the denim option, which means they sell their lint to the PCCA denim plant at Littlefield and share in the plant’s profits,” Smith noted. While the current market price may be higher than the price received through the denim option, over the years growers have benefitted from it, Smith said. He said probably 15 to 20 percent of the area’s cotton is in the denim option this year.
Hake said the high price mills are paying for South Plains cotton, despite a record U.S. crop, “reflects the strong mill demand for West Texas cotton that has been built by two back-to-back years of excellent quality.” He said it means there is a strong foreign and domestic demand for U.S. cotton and optimism about future consumer purchase of cotton goods.
The quality of the South Plains cotton “is virtually identical to last year’s record quality,” Hake said. “Discounts for low quality this year are very, very slim.” He said the reputation established by last year’s crop is one reason mills are pursuing this year’s South Plains harvest.
“Even at the current high price, it still is a bargain (for the mills) because of its spinability,” Hake said.
About 98 percent of the 1994 South Plains cotton crop has been harvested.