Never has a San Joaquin Valley cotton growing season started out stuffed with more uncertainties that 2001. Name a concern — water, power, prices, government support levels. They look like deep, dark holes of nothing but doubts.
The smartest farmers this year may be those who do not plant cotton or sharply cut back acreage.
Westlake Farms in Kings County, one of the largest cotton growing operations in the valley, has abandoned cotton for 2001. A large Tulare County farmer earlier this year flew barley seed on beds prepared for cotton. Ginners are reporting many growers idling land, uncertain about price and water availability.
As futures prices tumbled this spring, farmers sent back seed. Some wanted refunds. Others were trading Acala for “California Uplands.” The higher yield potential of a non-approved upland — even if the season could be shortened to reduce input costs — will not pencil out with futures in the 40s. And, bankers told growers they'd finance Pima with its guaranteed loan of 82 cents per pound, but not short staple cottons. That and the low short staple price sent Pima acreage projections to the 300,000-acre mark.
Water will be in short supply. The snow pack is lower than normal. However, it is not nonexistent as in the drought years. Most California reservoirs are above 15-year storage averages. Nevertheless, water deliveries will be only 10 to at best 40 percent of allocation. Farmers are fearful they could lose even more if the state's power crisis forces dam operators to let more water out to generate electricity to meet summer power needs.
“It is tough enough trying to make it without the state and federal government turning their backs on us. The water thing is killing us,” said one large acreage West Side farmer.
The biggest uncertainty that has every farmer feeling as helpless as a baby in a runaway stroller on the hills of San Francisco is energy.
Make that more fear than doubt. There's plenty of confidence prices will be higher. How high is the question.
The California Cotton Ginners and Growers Associations' Roger Isom put numbers together to demonstrate the huge economic hurdles facing cotton producers.
The associations' vice president and director of technical services estimates:
Diesel cost will increase production costs for fuel alone to $75 per acre this season, three times 1999 costs.
To pump with natural gas could cost $345 per acre. It cost $110-$150 the past two years. To pump with electricity, it will cost an estimated $205 per acre, almost double the 1999 cost.
Nitrogen fertilizer costs are doubling this year over the past two due to higher natural gas costs.
If somehow a producer makes a cotton crop, taking it to the gin will be another a shock. By the time it reaches the bale, the gin will have from $3 to as much as $11.25 per saw-ginned bale, depending on the gin's energy sources. Two years a go the cost range was 70 cents to $3. For roller ginning, the cost will range from $8.35 to $15 per bale. The per bale cost of hauling a cotton module will go from $1.87 two years ago to more than $3 this year due to added diesel cost.
All of this will add an estimated $73 million to the cost of growing and ginning California's estimated one-million-acre 2001 cotton crop vs. what it cost in 2000 when it cost almost $43 million more than it did in 1999.
“These numbers are a factual depiction of the seriousness of these energy increases on the cotton industry,” said associations' president Earl Williams.
Similar numbers can be generated across all California crops. For fresh fruit and vegetable producers who rely on refrigeration to handle and store their crops, the energy crisis looks even more devastating, especially if rolling blackouts threaten stored fresh produce. If there every was a year when hanging on was the goal, 2001 is it.