Cotton Farming Ginning Marketplace April 2015

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COTTON FARMING IS THE OFFICIAL PUBLICATION OF THE GINNING INDUSTRY.

More Patience Needed With New Technology I guess it’s no secret that we have some challenging times ahead. A new Farm Bill, a totally new way to think about cotton as a piece of the Farm Bill and dramatically lower prices than anyone really expected have all added to an already challenging business climate for ginners. These are times where we have to think a bit differently. The past few weeks have been full of meetings. Some were forward looking, and some were more reminiscent of the past. Some had people trying to figure out the future, and others were just wishing they could go back in time. I can truly understand both of these takes on our current situation. We’ve never quite been in this condition before, and most hope it passes quickly. Ginners are no different than any other downstream processors in many commodities. For ginners to survive, farmers must plant cotton. In order to plant cotton, farmers need to see an incentive. In some places, there are no real alternatives for the time being. These areas are seeing only small swings in acres projected for 2015. Elsewhere, cotton just doesn’t pencil out for farmers. These are the areas seeing much larger shifts. Regardless, it’s apparent we’ll see fewer acres in most of the country this year, and it will be a challenge to make it through the next few seasons. The buzzword I’ve heard in a lot of circles is input costs. This has more to do with production than ginning, but the same idea can be applied to ginning – just a different term. It’s called “variable costs.” Most of the discussions at our meetings have had to do with the cost of ginning. Bagging and ties, transportation to the gin, electricity and labor are all part of this equation. One of the most exciting things I’ve seen recently is the advent of automated bagging systems. We highlighted three of them at the Southern-Southeastern meeting in January, and many were installed (some experimentally) across the Belt. These systems reduce the need for one of the most expensive pieces of the pie, and that’s labor. I’ve seen unfair pot shots taken at some of these systems recently in the press. The fact that something is different doesn’t make it bad. The testing protocols will be worked through. That’s why these are “experimental” systems. Before we bury something, lets give some radical thinking some space to mature.

18 COTTON FARMING

APRIL 2015

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