Apparel | Wednesday, September 01, 2010

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SUPIMA SPECIAL REPORT: The Pima cotton crop in California

By Greg Wang

By EARL WILLIAMS
Executive Vice President
California Cotton Growers and Ginners Association

California planted its first commercial Pima cotton crop in 1989, some 18,000 acres under tightly controlled oversight and after two fairly successful years Pima was finally approved for open and uncontrolled planting by the state regulators.

The rest is history.

We grew from those few acres to a high in 2006 of 275,000 acres. It’s been a fluctuating situation with growers going in and out and up and down on Pima plantings because of many factors. Because Pima needs a little longer growing season and if Pima can’t be planted because of weather by April 10th to 15, many growers turn back to upland cottons. Pima prices also play a part in growers’ planting decisions from year to year and with no futures market to hedge, forward contracting becomes much more difficult especially at borrowing time. Other factors such as differences in yield of Pima versus uplands, competing crop prices and geographic location within the San Joaquin Valley also play into the plantings of Pima cotton as well.

Typically, we see Pima yields lower than upland by 10 to 15 percent. And there are several areas in the San Joaquin Valley that have not done well with Pima production over the years and steer away from growing it. One of the drawbacks to growing Pima for some has been the fact that none of the Pima varieties had important cost saving technology traits, like Round-Up Ready. For the first time in 2010 we had a Round-Up Ready Flex Pima variety available for planting.

As for the infrastructure, as acreage expanded so did the construction of stand alone roller gins and/or conversions of saw gins to either stand alone roller or combo saw and roller gins. At one time we had 25 roller gins in California and seven of those were combo gins.

At one time, cotton was California’s number one crop in terms of planted acres. In 1979 we hit the all time high of 1.6 million acres. In 1963 California had 299 cotton gins. But things have changed dramatically over the years and most rapidly in the last 10 to 12 years for many reasons: We planted our last 1 million acres of cotton in 1997 and Pima was 17 percent or 184,000 acres of that. We hit the lowest acreage since the 1920s last year at 190,000 acres and Pima was 62 percent or 118,000 acres of that. In 1997 we had a total of 101 cotton gins in California, which included 17 roller gins. Last year we had a total of 40 gins still standing and operable, of which 17 were roller gins. We operated 34 gins last year: 15 were roller and of the 15 roller gins operating, six of those were combos meaning that we only operated 28 physical plants.

Why the dramatic changes?
California’s diversity in agriculture has offered growers here many choices and as those choices broadened, cropping choices became more and more competitive. The economies of cotton worked well sometimes, sometimes they didn’t. With the onset of more permanent plantings then a lot of cotton acres were taken out of cotton forever or at least for a long time.

This 25-year rotation plan doesn’t fit cotton!

The movement of dairies from the urban areas because of encroachment from urban sprawl pushed many dairies to the San Joaquin Valley and thousands of acres of cotton land were taken away. Then the culmination of the water crisis over the years finally caught up with cotton over the past several years to the point that it drastically affected plantings of cotton, especially in an area where Pima cotton was predominant.

So we’ve seen the top, we hope to have seen the bottom and beginning this year, I sensed renewed enthusiasm about cotton. Our early projections had plantings estimated as high as 350,000 acres possible for 2010 with Pima in the 225,000-acre range. Higher cotton prices, softening of other competing crop prices and the poor dairy economy helped drive folks back to thinking cotton again.

Unfortunately, much of this enthusiasm was somewhat dampened with one of the toughest planting seasons we’ve experienced in a long time and several old timers say maybe the worst ever! We started with an early window in mid-to-late March and when April rolled around it was rain, cold, warm, more rain, more cold and more warm. We got on an every week cycle of these changes over about a three-week period in April that ran most folks to the sidelines with no windows of opportunity until very late April. Many hung in there with overall planting intentions, but many changed their minds especially on Pima versus uplands because of the lateness.

Latest estimates today puts California’s acreage for 2010 about 303,000 total acres. Of this total acreage, industry estimates are putting Pima acreage in the 170,000 acre range. Estimates today also put as much as 60 to 70 percent of this year’s Pima acreage planted with the RR Flex Pima variety. So, although we are pleased to see things moving back to the cotton side again, we are disappointed that it wasn’t more because the desire to plant more cotton again was certainly there.

Now the challenge becomes how do we maximize the yield from a late planted crop? Historically, whether Pima or uplands, we sacrifice some yield with lateness of ma- turity. We’ll do everything we can do as an industry through the Cooperative Extension Service to help growers with the best management decisions possible to make this late crop. Big hope today is for a favorable growing season and an extended good weather fall, especially for the Pima crop.

One of the real concerns the industry has had during this serious downturn in acreage has been maintaining the infrastructure to meet the industry needs if and when the turnaround came.

Fortunately, cottonseed prices followed the other commodity prices up during the last several years and this allowed most of the gins to survive very well on the seriously reduced volumes of bales. Cottonseed prices reached record levels at one point driving record per bale returns at many gins even with low throughputs. We have seen some gin closures and even limited mergers, but we have maintained a good infrastructure to service the renewed excitement for California cotton plantings return. The roller gin volumes have also been enhanced over the past several years with the increasing popularity of roller ginned uplands which in certain years has reached as much as 40 to 50 percent of the total upland crop.

We recognized many years ago that California’s cotton industry was being pushed to fewer acres with more focus on specialty or niche market cottons. Pima has certainly been a large part of that and we’re proud of the fact that for many years running now California produces over 90 percent of the U.S. Pima production annually.

The Supima organization that is the grower owned and supported non-profit advertising and promotional arm of the American Pima cotton industry has done a tremendous job in expanding the identity of American-grown Pima cotton using the registered trademark Supima name. Today, with over 350 licensees around the world licensed to use the Supima name in high-end yarns and textile products from home to high fashion, is especially exciting and has special meaning to us in California when we think about the fact that California produces over 90 percent of this Supima cotton!

With current demand high and supplies at near or at the sold out position today, we are extremely optimistic about the future.

Finally, much has been said and published regarding the water crisis in California. We have had a good water year in terms of rain and snowpack, but we have a ways to go to solving our water problems. Unfortunately, for cotton planting and planning this year most of the announced increases in allotments came too late to influence cotton planting decisions, but I do anticipate that these better than anticipated supplies for the balance of this season and better than anticipated carryover supplies to start next year should bode well for cotton plantings next year. So hopefully we’ve weathered the storms and its cotton’s time in California agricul- ture’s picture again for a while. Albeit smaller, but better prepared and focused on specialized production and processing of high quality cottons for specialized and niche markets.

Pima cotton is and will continue to be a large part of that future for the California cotton industry.