Making it Through the Tough Times...

The Cotton Economic Outlook Symposium was held this morning, and although the speakers presented some recent grim information on cotton prices and U.S. job loss, they also shared a bit of good news to the producers in attendance.

Featured speakers of the symposium included Bob Young with the American Farm Bureau Federation, Mechel Paggi from California State University and Ed Jernigan with FCStone.

Here's the bad news...

• Young reported that 2 million U.S. jobs were lost in 2008, and the U.S. could still see massive layoffs in the first part of 2009. U.S. citizens saw a drop in wealth, loss of credit and higher gasoline prices last year.
• China, a major importer of U.S. cotton, has recently decreased its imports. This has been a major cause of the cotton price decline. Jernigan said global cotton demand is set to fall at the steepest rate on record.
• Paggi reported that drought, particularly in California, has hit cotton growers hard and is now forcing them to re-think their planting strategies. He says water policy is being made in the courts, and many things, like protecting the Delta Smelt fish, have caused even more problems with water contracts and water availability for farmers in California.

All of that information is depressing, but growers can be very hopeful. Here's a bit of good news...

• Young says although the first part of 2009 might look a lot like the poor economy we've seen in 2008, the end of this year is expected to be better. Young said he anticipates there will be more lending opportunities available and lower interest rates that could boost the economy. Also, more jobs could be created and reinstated by the end of the year with the success of an economic stimulus package.
• Cotton demand might be down in China, but planted cotton acreage is also expected to decline in China this year. Jernigan said that many farmers in China lost money on their crop last year too, and surveys show that cotton acreage will be down around 17% this year. Other world countries are decreasing acreage due to lack of an efficient water supply. This will bring on a tight supply in China and other importers, which will help U.S. cotton exports in the future.
• Jernigan also said that he believes cotton prices have bottomed out, and he reassured growers that the worst is probably over for a while.

As agriculture is the nation's number one economic industry, it’s evident that these struggles have impacted the cotton industry through the marketing chain. Growers, ginners and retailers alike have faced struggles. Fortunately, from my experiences in agriculture, I have found that people in this industry are also some of the most optimistic people. They love what they do and believe strongly in it. If anyone can make it out of tough times, I know the folks in agriculture can!