By Johnny Parker, Commonwealth Gin
There has been a flurry of booking cotton over the last three weeks as the price of cotton moved through 80 cents, offering local producers an opportunity to lock in a profitable margin on a portion of their 2013 cotton production.
Along with RA crop insurance, locking in several hundred pounds per acre when profitable has been a winning combination for reducing risk in Virginia.
The practice of growing cotton provides a lot of sustainability for local farming operations.
Peanuts and soybeans need a lot of separation between cropping years due to higher incidence of diseases compared to other local row crops. Corn or cotton fit the bill, and of the two, cotton offers a much better opportunity with superior profit margin, much better drought tolerance, and one of the best insurance crops for that unforeseen bad year.
Back in the fall, the estimate for cotton acreage reduction was around 30 percent from 2012. Now with a 15-cent rally, while at the same time grains are trending down, the expectation of a cotton acreage reduction is being rethought. Some farmers are adding acreage back, while others who took a break from growing cotton last year are putting in back into their rotation for 2013.
I am certainly bullish on cotton. Good things are coming.