South Plains cotton producers need higher prices to break even

LUBBOCK, Texas (KCBD) - The past two years have dealt tremendous blows to the cotton industry with drought and inflation. Now, cotton producers say they need higher prices than previous years just to make a living.

The Vice President of Marketing for the Plains Cotton Cooperative Association, Keith Lucas, said the average cost of production last season was $870 an acre, so the prices had to be higher to turn a profit.

“In order to be able to actually make money, a producer would have to hit a very high price,” Lucas said. “If he didn’t have seed credits, he’d have to be almost a dollar a pound to break even.”

Lucas said a couple years ago, 60 to 70 cents a pound was a good price for South Plains cotton. Now, producers need to see mid 80s up to 90 cents a pound.

“We’ve only been over 80 cents about 17% of the time, so less than one-fifth of the time it’s even been at levels that I’m talking about, we need at minimum if not more to break even,” Lucas said.

If prices go lower than that, Lucas said you may not see any cash back, unless you make a good yield, which is hard with little to no rain.

“If you were to wake up and see cotton prices go, especially for new crop, go below 80 cents again, it’s just not going to be an incentive for growers to grow cotton,” Lucas said.

Lucas said that price is a good number for everyone because it keeps those who are in the tractors paid and clothes on everyone’s back.

“It’s a good level for both growers, mills, and brands and retailers to be able to all stay in the game,” Lucas said.

As for this year, he said there is a lot of uncertainty on where prices will go and how much rainfall the South Plains will get.

“I’m afraid to say right now it’s not looking as good as I would hope,” Lucas said.

In a good year, Lucas said the Southwest, which includes Texas, Oklahoma and Kansas, would gin six million bales. Last year, producers only made half of that.

Lucas said we either need to see higher prices or lower input costs and some good rain to have a successful cotton season.

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