Gatherings of San Joaquin Valley cotton growers, ginners and marketers over the past few seasons have looked like Phil Angelides political rallies.
Phil Angelides? He is the unknown running for governor of California against Gov. Arnold Schwarzenegger and trailing by double digits in the polls.
However, the recent annual Supima meeting for the valley's Pima cotton industry at Harris Ranch Restaurant, Coalinga, Calif., looked like an autograph party for Jessica Simpson.
It was almost a standing-room-only luncheon for farmers, merchants and ginners who came to marinate themselves in the continued success of Pima cotton in the fashion world and the fertile soils of the San Joaquin Valley.
How good is it?
Most everyone in the room was wondering what USDA prognosticators were smoking when they made an estimate of almost 900,000 bales of American Pima production this year. Experts figure this is about 100,000 bales too high. A percentage discrepancy that significant would normally have a big negative impact on a commodity market. It hasn't. In fact, the American Pima industry actually wishes that USDA proves correct because they could use more cotton to satisfy unmet worldwide demand for American Pima cotton.
Supima Executive Vice President Marc Lewkowitz and others are convinced the United States will produce no more than 800,000 bales this season, maybe 825,000 bales. However, certainly not the 893,000 bales USDA is projecting. Supima believes USDA's 1,137 pounds per acre yield estimate for California and the 1,287-yield estimate for American Pima Beltwide are too high.
The textile world is demanding Pima cotton, but U.S. and worldwide cotton growers have not kept up with that consumption for five years, according to Lewkowitz. This has run Pima prices well beyond the $1 per pound level for months.
The latest spot market for top grade U.S. Upland cotton is about 53 cents per pound. The spot market for Pima is $1.30 per pound.
Many of the cotton farmers in the room have filled bank accounts with Pima cotton receipts the past few years, and no doubt their children dress well. However, some of the most successful farmers in California could only chuckle at the notion of selling and someone buying a Pima cotton woman's T-shirt for $100. Buxton Midyette, Supima's New York's marketing director, said an American Pima T is one of the hottest fashions today.
However, SJV cotton growers are also smiling all the way to the bank after growing and selling the high quality cotton that goes into “the perfect T-shirt.”
There is no end in sight for the American Pima rocket ride, according to Lewkowitz, who said China is guiding the ELS rocket just like it is driving the world upland market with its unquenchable demand for cotton to drive its industrial textile machine and satisfy its growing economy of 1.3 billion people.
China is consuming 600,000 bales of ELS cotton annually en route to what Lewkowitz says will be 1 million ELS bales per year. China devoured 42 percent of America Pima production last year, 246,000 bales. The United States may just have the inside track on that 400,000-bale China ELS consumption increase. In 2000/01, China bought 3,000 bales of U.S. Pima.
China's growing middle class is seeking quality, branded products. In the cotton textile world, that is ELS cotton with a Supima label.
America is the world's No. 1 ELS exporter with 50 percent of world exports leaving from U.S. ports; America produces 33 percent of the world's ELS cotton.
What is even more remarkable is the impact American Pima has had on the SJV cotton industry. For the first time in the history of SJV cotton, Pima exceeds Acala/Upland acreage this season, according to the recent California pink bollworm program acreage accounting, which reports 272,000 acres of SJV Pima this season versus 255,000 acres of Upland. USDA says there are 288,000 reports 272,000 acres of SJV Pima this season versus 255,000 acres of Upland. USDA says there are 288,000 acres of SJV Pima.
This is partly due to a 26 percent increase in SJV Pima acreage, but also due partly to a precipitous decline in Acala/Upland acreage because of low upland prices.
Last year, SJV Pima accounted for 88 percent of U.S. ELS production acreage. In 1987, it was 1 percent: Texas, New Mexico and Arizona account for the 12 percent of U.S. production.
American Pima acreage is expected to continue increasing across all four states since carryover stocks once again expected to be near zero for this marketing season and next year, which bodes well for prices. Arizona, which once was the No. 1 American Pima producing state, rewwcorded a sharp, 71 percent increase in acreage this year due to the start of a pink bollworm eradication effort.
However, the ELS acreage in the state, 7,000 acres, is the smallest among the four states. Continued success with the PBW eradication effort could see another solid jump in Arizona in 2007.
Fueling the unprecedented demand for American Pima worldwide is Supima, the voluntary, promotion arm for growers and marketers which operates an a merger budget of $2.6 million per year from its Phoenix headquarters. It has an office in California with the California Cotton Ginners and Growers Associations now representing Supima in California.
More than 90 percent of U.S. Pima growers support Supima with a $3 per bale annual assessment, a levy that has not changed since Supima was formed in 1954.
Supima gets most of its money from licensing fees the association initiated in 2000 when it began charging textile mills $1,000 per year for the right to use the Supima brand on its products. It had more than 300 licensees in 2005 when the grower-directors of the association approved a dues increase to $5,000.
Some licensees dropped out as expected, but 240 remained and the number is rebounding daily with new licensee applications, according to Kings County, Calif., cotton producer Jim Hansen and Supima board chairman.
“The increase in licensing fee raised an additional $1 million to support Supima's promotional efforts,” he said.
The licensing fees have supported an advertising campaign for several years that has been revamped this year. For the first time, the association is launching its own trade show in January in New York City where 20 to 30 mills that use American Pima will pay to exhibit.
Supima President Jesse Curlee said the goal is to make the show self-supporting. Midyette said the show is to “generate demand for Supima cotton, not to generate revenue.” The Supima exhibition will be held at the same time two other major textile trade shows are being held in New York City.
Look for the NSP Tag on the Bag to Ensure Hybrid Forage Quality
With the recent changes in silage sorghum genetics with traits like Brown Midrib (BMR) sorghums and the continued research and development of high quality forages, the National Sorghum Producers (NSP) launched a branding program last spring aimed at helping producers make seed selection decisions.
“In the last ten years, sorghum breeders have made a lot of progress and this has created a wide quality range for hybrid forages,” said NSP CEO Tim Lust. “Our Quality Hybrid Forage program was designed to set the bar for yield and quality and give producers another tool in their toolboxes.”
NSP branded varieties have the approximate quality and yield of corn forage, and are also held to a high genetic purity standard. The silage hybrids are tested at the Texas Agricultural Experiment station in Bushland and to ensure genetic purity, the hybrid is planted in the Texas Seed Trade Association/Texas Department of Agriculture growout program. NSP makes no claims regarding the standability of qualifying varieties.
Seed companies pay a small royalty to NSP for the right to use the tag on bags of qualifying varieties. The revenue generated will help fund promotion efforts and legislative work. Lust said that since launching the program last February, NSP has sent out thousands of tags for qualifying varieties. “The program is gaining momentum and in its first full season we expect to get more participation from seed companies who offer superior quality hybrid forage seed.”
NSP, in coordination with TAES, initiated the trials in 1999 to educate agricultural researchers about the unique characteristics of forage sorghums. In the years since, NSP used the data while working with USDA's Risk Management Agency to establish a pilot program for sorghum silage insurance. NSP also presented data to the Farm Service Agency to make some silage sorghum varieties eligible for Loan Deficiency Payments.
NSP Research Director Dr. Jeff Dahlberg said that the research has also shown the value of sorghum silage compared to corn. “We've known for years that forage sorghum can be as good or better than corn while using less water. The Bushland trials validate that. As pumping costs continue to increase and water resources dwindle, producers and end-users will continue their search for high yielding, top quality, cost-effective silages.”
NSP represents U.S. sorghum producers. Headquartered in Lubbock, Texas, in the heart of the U.S. Sorghum Belt that stretches from the Rockies to the Mississippi River and from South Texas to South Dakota, the organization works to ensure the profitability of sorghum production through market development, research, education and legislative representation.