Annual Cotton Commission Meeting Updates Producers on Economic Outlook

Tifton, GA

At the University of Georgia’s Tifton Conference Center, cotton producers, industry professionals, and experts recently gathered for their annual meeting – a time for producers to fellowship, get updates on the industry, and hear from experts before the 2023 season gets underway.

“It’s just an event to try and gather as many cotton producers from across the state as humanly possible in one place at one time to discuss what’s going on in the cotton industry for 2023 and beyond, as well as a time together to fellowship, meet with our extension specialists and extension agents to learn about new farming techniques and practices and technologies, as we make plans for 2023,” says Taylor Sills, Executive Director of the Georgia Cotton Commission. “We’re good at growing cotton here in Georgia, so they’re looking to find ways to pinch a penny without cutting a corner to continue to produce that sustainable, high quality crop as we move into the next year and beyond.”

Perhaps the most anticipated part of the meeting each year are the cotton production workshops where growers can hear from experts like Camp Hand, Extension Cotton Specialist with UGA, who spoke to producers about the upcoming year. Hand says growers need to be making the most of every dollar as input costs are still high and the price of cotton is down at least forty cents from where it was last year.

“Even though inputs were high, cotton prices were high,” says Hand. “Almost a year ago, the contract price of cotton was a dollar and thirty cents, which is really good. I mean it’s been a long time since it was over a dollar, but now we’re looking down the barrel of a situation where the contract price for December is about eighty-five, ninety cents maybe and input prices hadn’t gone down that much, and so margins are going to be a little thinner for our guys.”

According to Amanda Smith, a Senior Public Service Associate with UGA, one big concern for producers this year is the drastic increase in interest rates – an issue that Smith says could double interest expenses for producers.

“Last year, interest rates may have been around four, four and a half percent for some producers and this year, it may be between seven and nine percent, and so, their interest expense has increased significantly from last year, and so maybe they had interest expense of fifty thousand dollars on an operating note last year, this year, it could potentially be one hundred thousand dollars and that is dramatic thinking that they haven’t increased their operation size or their not farming more acres; it’s the same size of acres that they’re farming but a much bigger expense because of interest alone,” says Smith.

It’s because of that reason, Smith says growers, more importantly than ever before, need to know their cost of production for the year so they can make decisions that will best keep them financially sound.

“More important than ever is to know cost of production, and when producers know their cost of production, then they can have an idea of what their break-even price is, and so, if they know their break-even price and they can potentially market it above that break-even price, they know they’re covering their costs and gonna make some positive margin,” says Smith.

By: John Holcomb