The year opens with dark times for the U.S. cotton industry.
It's grappling with the global fallout from prices being kept artificially high due to subsidies paid to farmers in China.
“These false high prices are encouraging overproduction,” Joe Nicosia, executive vice president of Louis Dreyfus Commodities, told farmers gathered downtown for the 2013 Beltwide Cotton Conferences. “We have a dilemma on our hands.”
Nicosia said the Chinese government pays inflated prices to farmers for cotton, and then stockpiles domestic and imported bales — to the extent that China, the United States' main cotton customer, could stop buying at any time.
In response, Nicosia recommended scaling back production and lowering prices.
That proposition might not appeal to the ginners in the crowd, he said, but with the glut, manufacturers need incentive to market cotton and cotton-heavy blends.
“Once that happens, consumption will start to grow again,” he said.
Even as China's cotton stores grow to some 46 million bales, the world's textile giant is skirting the high price by spinning more polyester.
The country has become the world's leading cotton grower — producing 31 million to 35 million bales, compared with about 17 million bales in the United States.
But whether consumers soon see prices drop and cotton percentages rise for their T-shirts and jeans remain to be seen, said Gary Adams, vice president of policy and economics for the National Cotton Council.
“You either have to have a weakening of demand or you have to have an increase in supplies,” he said. “It's got to be offered at a lower to get them to use it”
San Angelo grower Doyle Schniers said he anticipated a bust year of low prices and low production due to the continuing statewide drought.
“The meteorologist, he's staying pretty neutral right now. Neutral sometimes means less than neutral,” he said. “You take low prices with low production, and it doesn't work.”
Schniers was one of about 2,200 attendees from about 21 countries attending four days of presentations and seminars at the San Antonio Marriott Rivercenter hotel and the Convention Center.
Topics range from highly technical discussions on irrigation and pest control to more mainstream themes, such as using social media — such as an agriculture extension agent in North Carolina weighing in on whether to spray for the kudzu bug or as a cotton farmer posting a cell phone video that may be viewed anywhere in the world.
“In the world of social media, if we're not getting ourselves out as experts, there's a vacuum,” Monsanto spokeswoman Janice Person said. “I know a lot of you farmers have auto steer and stuff, so there's no reason you can't post a photo.”
