Plains Cotton Growers, Inc. (PCG) held its quarterly board meeting at the FiberMax Center for Discovery, with approximately 60 PCG leadership, directors, staff, and guests in attendance.
PCG president Brent Nelson, of Sudan, presided over the meeting. A mood of cautious optimism was prevalent among those in attendance as all expressed thanks for the recent rains and expressed optimism for the crop this year.
During the meeting Keith Lucas, the vice president of marketing at Plains Cotton Cooperative Association, gave an in depth look into the most recent cotton market report, prospects for cotton demand, and prices later in the season. He noted that world consumption continues to recover from the COVID-19 pandemic with demand almost back to prepandemic levels.
When discussing the U.S. outlook, Lucas reported the July World Agricultural Supply and Demand Estimates (WASDE) report projects an increase in U.S. exports from 14.80 million bales to 15.20 bales since the June WASDE report.
Lucas added that due to the strength in demand, prospects for a larger U.S. crop have not adversely impacted prices for new crop cotton. He said with prices now in the mid-to upper 80-cent range there is a pricing opportunity that growers should be looking to take advantage of. He noted that cotton futures have only been above 80 cents, 33% of the time in the last 10 years and only 17% since 2014, making this a rare opportunity to lock in prices at these levels.
Tas Smith, vice president of producer affairs with the National Cotton Council (NCC) provided the crowd with an update of NCC’s recent activities and provided a rundown of current and prior COVID-19 relief programs, as well as agriculture and climate policy updates. He concluded his presentation with a discussion of the U.S. Cotton Trust Protocol.
During his report Smith noted that the Coronavirus Food Assistance Payments (CFAP) 2.0 payments have been fully disbursed and noted that the Wildfire and Hurricane Indemnity Program Plus (WHIP+) 2018 payments have been completed and disbursement of the last portion of 2019 payments is underway. He mentioned that there is a continued push for WHIP+ to be extended to cover 2020 and 2021 losses.
Rounding out the meeting was Tom Sell, co-founder and manager of Combest, Sell & Associates. Sell provided an extensive update on the current situation in Washington D.C.
Sell said ensuring agriculture interests are protected in upcoming legislative efforts, means the industry will need to continually be actively engaged on a broad array of negotiations, ranging from tax policy to climate, in the coming months.
Sell concluded his presentation by stating that as an industry, agriculture continues to do a great job promoting the value of agriculture and gaining support for its priority issues in Washington D.C.