PCG EMAIL SERVICES: LUBBOCKONLINE.COM - China's stockpiled bales, truck-driver shortage not helping cotton industry
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LUBBOCKONLINE.COM - China's stockpiled bales, truck-driver shortage not helping cotton industry
Texas Cotton Association's annual flow meeting describes challenges in moving cotton
Posted: September 12, 2014 - 3:39pm
Updated: September 13, 2014 - 12:13am
By JOSIE MUSICO
A good cotton year means extra work getting that crop to its destinations, industry representatives said Friday.
The Texas Cotton Association's annual flow meeting — the flow refers to movement from fields to mills — listed examples of those challenges.
"There is a great deal of concern in this industry about how this shipping season will fare," said Bobby Walton, first vice chairman of the American Cotton Shippers Association.
Some worries surround the vast amount of cotton stored in China. The Chinese are now stockpiling about 62 million bales — or close to half the world's cotton supply — said Darren Hudson, another of the dozen or so speakers.
"The question most of us are asking at this point is how is China going to handle this massive amount of stocks," Hudson, a Texas Tech agricultural economist, told about 200 people in the Overton Hotel and Conference Center.
Hudson said China developed the stockpiling policy in response to a cotton shortage years ago that hindered textile production — they weren't in a hurry to experience that scarcity again. But with cotton's shelf life only about five years, the Chinese will eventually have to release much of that stored cotton.
When that happens and the world's cotton supply significantly exceeds its demand, the price drop could be daunting.
"If China gets very aggressive on this, we could see 20- to 30-cent cotton," Hudson said. "It's not an inconsequential thing if China decides to pull the trigger and start reducing stocks. ... The U.S. will still ship cotton around the world, just at a lower price."
Closer to home, the cotton transportation process could be smoother if more folks were available to transport it.
"We have a lot of fallout of drivers," said Mike McBain, owner of R&T Truck and Laredo Transfer.
Truckers are leaving the field for reasons such as Compliance, Safety, Accountability, a federal program that measures driving violations and has been criticized for listing accidents on drivers' records without specifying fault, McBain said.
"Those things are causing older drivers to leave the industry at an increased rate, and trucking companies have been slow to replace them," McBain said.
Increasing salaries could help in recruiting new drivers, he said, but those higher operating costs could bring their own set of problems.
David Fields, president and CEO of the Gulf Compress in Corpus Christi, suggested teaming up various segments of the industry is a good start to tackling troubles.
"There are problems that need solving, and if we're ever going to find solutions, it's going to be through communication," he said. "Our common interest is the health of the U.S. cotton industry."
josephine.musico at lubbockonline.com • 766-8796
Follow Josie on Twitter @josiemusico
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