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EC, AR | I quit cotton in 05, sold all my equipment except planter which plants corn and bean now. Bought two more combines and don't plan on buying another cotton picker ever!! More money and less risk in rice, corn and beans. All the gins are gone in our area and I don't think alot of acres can be added here because of lack of infrastructure. The last 5 years there are grain bins on all the big cotton farms that used to own a gin so I don't think they plan on going back.
It is easier for other parts of the world to increase cotton acres and drive the price back down in one year ---take alot more than one year to pay for new equip.
My opinion is if you want to farm cotton take the money that would spend on a new picker --$350,000--and buy July 105 puts they should be about $2000 when cotton hits 1.30 and just wait and harvest your crop in May when the March acres come in large. Let see that would be 175 105Ps and you can bet it will be 80 cent or lower, so that would be $2,187,500 less the cost of $350,000 for a profitable cotton harvest of $1,875,500. Plus you can still harvest a profitable grain crop off the land that would have been in cotton!!!!!!!!!!!!!!!!!!!!!!!!! | |
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Cotton
