Credit: University of Georgia College of Agriculture and Environmental Sciences
Georgia cotton farmers endure roller coaster prices
Georgia cotton farmers are feeling the pinch of a massive drop in prices for the crop over the past few months.
Experts blame recent market volatility on recessionary pressures, a drop in clothing demand and the U.S. dollar’s rise in value.
Taylor Sills of the Georgia Cotton Commission said the price plunged from a high of $1.54 per pound in May to 83.14 cents last month.
“Traditionally, 83.14 would be a really good price for cotton,” Sills said. “But because of supply chain problems and high input costs such as diesel and fertilizer inputs, it’s kind of made a new world for cotton production.”
Prices have rallied somewhat in recent weeks. It’s $1.08 today.
But price roller coasters like this are nothing new for farmers.
“Cotton and cotton-related products are discretionary items,” said Yangxuan Liu, who teaches agriculture and applied economics at the University of Georgia. “Thus, cotton prices tend to follow the economy, with cotton prices rising during economic growth and declining during recessions.”
The S&P 500 Index recorded a 20% drop from January to June and many economic indicators point to possibility of a recession, Liu adds.
In addition to volatile prices, weather remains a perennial concern for farmers.
Sills said that while an exceptionally dry June has given way to a more favorable July and August, the busiest months of the tropical storm season lay ahead.
Cotton is the state’s top row crop. Georgia farmers produce about $1 billion worth of it every year.