PCG EMAIL SERVICES: COTTONGROWER.COM - Year-End Cotton Update from West Texas

PCG Email Services pcg_email_service at plainscotton.org
Tue Dec 19 15:32:40 CST 2017

COTTONGROWER.COM - Year-End Cotton Update from West Texas


December 18, 2017
By: Dr. Seshadri Ramkumar

With Christmas and New Years on the horizon, harvest on the Texas High Plains is about 85-90% complete. The recent estimate from the USDA puts this year's production of the U.S. upland crop at 20.713 million bales. Cotton from the High Plains of Texas will be about 5.57 million bales, and the total crop from Texas will be about 9.5 million bales.

A large group of stakeholders gathered at Lubbock-based Plains Cotton Growers, Inc. (PCG) in mid-December to discuss the current harvest situation, shipment of cotton and impending tax legislation in the U.S. Congress, among other topics.

Steve Verett, executive vice president of PCG, recognized the importance of shared contribution and information sharing, stating, "The interest and participation of stakeholders with diverse expertise is a testimony to the importance of the cotton sector in the High Plains." The industry, he added, gains more information from such meetings that involve people from R&D, banking, academics and representatives of elected officials.

Shawn Wade, PCG's director of Policy Analysis and Research, stated that this year's crop in the High Plains will be larger than last year's total of 5.1 million bales.

In Washington, DC, action is in high gear to pass the Tax Cut and Jobs Act, which will result in a permanent reduction in the corporate tax rate from 35% to 21%, beginning next year. This pro-business legislation is expected to enable long-term capital investments by the industry. Kody Bessent, PCG's vice president of Operations and Legislative Affairs stated, "Overall, the revised tax code provisions should be positive for agriculture."

The industry is closely watching the quality of this year's High Plains crop. According to Danny Martinez, area director of the USDA Cotton Classing Office in Lubbock, about 50% percent of the crop in the 24 counties the office serves has been ginned. To date, there have been some micronaire issues, but other important aspects such as length, strength and color grade are good. Seasonal average value of strength shows the cotton is in the strong range, with the average strength being about 29.78 g/tex. Length is in the 36 staple, which is generally expected in the area.

Martinez expects about 4 million bales to be ginned this year from 72 gins – all of which gets classed in the Lubbock office.

Mark Brown, director of Field Services at PCG, stated that quality – especially low micronaire – has been a concern this year. Probable reasons could be the cool and cloudy weather in September, as well as some late planting situations that did not let the crop mature well enough for the harvest. The High Plains will have a good crop, and some gins may have to run until February or March to wrap-up this year's crop.

Regarding cotton demand, Turkey and Pakistan are buying. Getting cotton quickly out of the United States is important from an exports point of view.

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