Extreme summer heat hurt the quality of the crop. But this could still be a good year for Georgia farmers because international demand is up.
At the beginning of August, there were 45.5 million bales of cotton in global inventory. It's the lowest level in more than a decade and that's creating high demand for one of Georgia's top cash crops.
"India, the number two exporter in the world, is not exporting. The number one user of cotton is importing, that's China. Pakistan's been ravaged with Old Testament style floods. So the U.S. is in the drivers seat, but we're just about out of cotton ourselves," said Keith Brown, president of Keith Brown & Co. in Moultrie.
He says the global demand for cotton has sent the price per pound to a near 18 month high at 87 cents. That's good. What's bad is the crop itself.
"We're seeing evidence of the heat ravaged crops we have. The cotton matured too early. I have several clients that are going to be defoliating cotton and gathering cotton around Labor Day weekend. They all tell me any cotton gathered around Labor Day is not good cotton," said Brown.
The cotton may not be in good shape, but the futures market is already looking bright for next year.
Brown said, "We're already looking at December cotton for next year approaching 80 cents. In days gone by that would be a super attractive price for farmers, and it still is."
But even during times when the demand for cotton sent prices soaring as high as $1.15 per pound ,as was the case in 1995, the market reacts and production costs go up as well.
It's gamble in a Bull market where climate, rainfall, and global demand are all rolled into one.
"For those people who provide an input, they have green light to raise those prices. For instance, a bag of soy bean seed went for $18 now its $45. A bag of cotton seed next year may go as high as $500," said Brown.
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