Keys to cotton price outlook simple, not certain

Drought during the growing season and hurricanes during harvest time usually would translate into poor quality cotton. But that wasn’t the case this past year for Georgia producers.

“The quality from this past year’s crop has been tremendous, despite the weather problems we’ve seen,” says Don Shurley, University of Georgia Extension economist.

Looking at quality data from past years, Georgia’s most persistent problems, he says, have been color and staple. “Every once in a while, we get high micronaire due to drought. But color grades and staple have been the consistent thorns in our side. And color is largely weather related, caused primarily by weather problems during harvest,” says Shurley.

It’s important that Georgia growers remember that they’re now in an export market, he says. “Two of every three bales produced are sent overseas. But it’s interesting that there’s not a global standard in terms of measuring quality. That’s a big question mark. If we were interested in comparing our cotton to Brazil’s cotton, or Australia’s cotton, it would be difficult. But we’re in a global market, and we’re in competition with these other countries,” he says.

As for export customers, China continues to be the key player, notes Shurley. “If China needs cotton, we must be able to export to them. If we continue to produce 18 to 20 million bales of cotton per year in this country — considering the current state of our textile industry — we must be able to export 12 to 13 million bales annually. If not, then we don’t need nearly as much cotton as we’re producing today,” says the economist.

Looking at Georgia’s 2004 cotton crop — beginning the week of Sept. 9 — color remained at a good level, says Shurley. “Color got worse as we proceeded through the harvest season, but it was still pretty good. What surprised me is that the cotton that is less than 41 — what we call light-spotted grades and what you’re discounted for — wasn’t a problem this past year. It hovered around 10 to 12 percent of the crop throughout the harvest season. It hasn’t varied much despite the weather and rain this crop saw,” he says.

The staple of Georgia’s 2004 cotton crop was at about 34.5 and close to 35, he says. Uniformity trended downward as the harvest season progressed, he adds.

“Micronaire also trended downward, but it’s still in the acceptable range.”

Research, says Shurley, has shown a relationship between strength and harvest timing. “We were please to see that strength was good throughout the harvest season.”

Comparing Georgia’s 2004 crop to past years, staple is better with much less short staple than in other years, he says. “Strength also has been very good, with three-fourths of bales grading 29 or higher. This is fairly high strength in terms of what mills are looking for.”

In terms of how growers are paid or discounted for quality factors, Shurley says averages from this past November show that growers were being paid a little over one half cent for a staple 35 and being discounted about three quarters cent for a staple 33.

Growers, he continues, were paid about 1.5 cents for a 31 color and discounted about 1 1/2 cents for cotton below a 41. Growers also were docked about $4 per bale for low uniformity, he says.

“We’re being paid more now for color than we once were paid and about the same for staple. Payment for uniformity also hasn’t changed. One of the things we’ve noticed, particularly on the discount side, is that discounts are heavier when a particular quality parameter is a problem. If we have a problem with short staple — if there’s a lot of it in the pipeline — we tend to get hit a little heavier for it.

“We don’t have a lot of short staple this year, so the discount isn’t nearly as much. We made a lot more staple 35 this past year compared to what we usually make, so those who have 35’s aren’t getting paid quite as much for them. There’s not a lot of competition for it. This is supply/demand at work.”

The No. 1 complaint about Georgia cotton, says Shurley, has been short fiber content. Staple, he explains, is the upper-half mean length — the average length of the longest 50 percent of the fibers in a sample. If a sample has 100 fibers, you take the average of the longest 50 of them.

“The staple is not the average fiber length of the sample. It’s the average length of the best half of them, so it’s actually above the average.”

Uniformity index, he says, is the average length of the sample — which we don’t know — divided by the staple. “If this is the formula for the uniformity index, we can calculate the average length. It’s simply the staple multiplied by the uniformity index, which the classing data gives us. From those two numbers, we can calculate the average length of fiber in a sample.”

There’s much variability in the measurements, says Shurley. “Take a bale with a staple of 33 and a uniformity of 79 — short staple and low uniformity. The average fiber length in that sample is a little more than 26.

“Take another bale with longer fiber and high uniformity, and the average fiber length is almost 20. That’s a difference of about 3/32 of an inch, which is a very significant difference.”

Looking at data from 1999 through 2004, Shurley says the average length this year is 28, which is the best during the six-year period.

“Staple and uniformity must be taken together. If uniformity is high, say an 83, and staple is 33, then everything is uniformity short. It wouldn’t be desirable under some circumstances. You can have a ‘middle of the road’ uniformity, and if your staple length is much improved, then your average length is higher. So there has to be less short fiber content in that sample.”

e-mail: [email protected]

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.