Robert Weil, president and CEO of one of America's oldest cotton merchants, calls today's cotton business the most stressful in his 26 years as a cotton merchant and probably the most tense since World War II.
Weil, second vice president of the American Cotton Shippers Association, told the recent Western Cotton Conference in Fresno, Calif., that with a huge American crop in the field and the adjusted world price less than 30 cents per pound, everyone is looking for someone to blame and some way out.
He said it is time to “turn down the heat and figure a way to get out of the kettle.”
Right now producers are watching the loan deficiency payment continue to raise, compounding the fact that 52 percent of farmer income is now in the form of government payments.
No one wants it that way, but that looks to be the only way producers may survive this season.
“George Bush is going to be the biggest buyer of cotton this year,” Weil told more than 150 on hand for the 19th annual conference sponsored by the Western Cotton Shippers Association.
Nerves are frayed as farmers and merchants wrestled with issues like the strong dollar shutting American cotton out of the world market and a domestic textile industry in an economic freefall.
No one has any crystal ball solution to the problem other than to continue unprecedented federal support for cotton farmers and that is becoming increasingly difficult, according to Neil Gillen, American Cotton Shippers Association executive vice president and general counsel.
Made more difficult
It was made harder with the Democratic takeover of the Senate with Vernon Sen. James M. Jeffords' defection from the Republican Party. That displaced the major influence of Cotton Belt Republicans.
Gillen said ACSA strongly supported the House version of the new farm bill. He called it “exceptional” for supporting cotton producers, but it will be difficult to get that bill through the Senate where he says Senate agricultural chairman Tom Harkin wants to resort to means testing for government support and other provisions considered unwanted by the cotton industry.
While it will be thorny to get House version of the farm bill passed out of the Senate, Gillen believes the final farm bill will “closely resemble” what the House has passed.
It will help, but it will not be enough.
Weil was one of several business leaders called to the White House earlier in the summer to discuss the state of the economy.
White House economic advisors wanted to known when business expected the recession to end, hopefully before mid-term elections.
“They wanted a weather report,” he said, adding that he informed them that agriculture and the domestic textile industry was creating their own weather like that of a forest fire and it is economically consuming them. And the fire was started and continues to burn because of strong dollar shutting exports out of the world market and making the U.S. a magnet for imported textiles.
“I think the question that needs to be asked is cotton and the domestic textile industry strategically important to the U.S.,” said Weil. Foreign-made electronics may not be, but Weil believes cotton and the textile industry are.
No one seems to be asking that question, he said, sensing that Republicans and Democrats alike were willing to let the textile industries move offshore like others industries.
“I think the government is starting to listen about the strong dollar” and its impact on American industries, Weil said.