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Cotton growers face uphill cost battle

Surviving 2002 will require slashing production budgets that in most cases have already been cut, squeezed, and then cut some more. In the quest to grow cheaper cotton, Mississippi State University economist Fred Cooke says, producers must focus on both cutting input costs and maintaining yields.

Cooke, an agricultural economist at Delta Research and Extension Center in Stoneville, says, “This is no time to spend money you don’t need to spend. Cheaper cotton, though, means you’ve still got to make a yield, because you’ve got to make high yields in order to reduce your cost per pound.”

The average cotton farmer, according to Cooke, has out-of-pocket costs of around $485 per acre. Even with yields of 800 pounds per acre, that means it’s costing the average farmer 60 cents to produce one pound of cotton. Decreasing costs per acre to $375 per acre, with an average yield of 700 pounds of cotton per acre, isn’t the answer either because it’s still costing 53-cents to produce one pound of cotton.

For those who still want to be in this business in 2003, the answer may lie in a one-two punch. That is, knocking production costs down to about $375 per acre, and increasing average yields to 850 pounds per acre.

“We can’t win with cotton prices at current levels, even with high yields. What that means is we must reduce our costs without sacrificing yields. That will require looking at the whole production system for your farm, and making across-the-board cuts,” Cooke says.

Reducing tillage, or eliminating it completely, may be the first step to whittling down those production budgets.

Cooke defines reduced tillage as a running a Paratill and then preparing seedbeds in the fall, with a spring Do-all operation ahead of the planter. No-till, he says, is just what it says no tillage, except for a re-bedding operation every three to five years. “For cotton, you need a good bed to get the soil temperature right and to have proper drainage.”

Both systems reduce the requirement for tractors, equipment and labor, while also cutting diesel and repair bills. They can also to some extent impact general farm overhead, by reducing the level of farm liability insurance and workman’s compensation needed.

“For these systems to really have an impact, you can’t have full tillage on your soybeans and reduced tillage or no tillage on your cotton. You’re still stuck with all of your tractors,” Cooke says. “To get all of the economic benefits of these systems you’ve got to adopt the production system for your whole farm, not just for one crop on your farm. You’ve got to look at what it means to have fewer tractors, not just run them less.”

“We’re not exactly recommending these practices, but all show some promise on some farms,” he says.

Cotton growers feeling the pinch in 2002 may also want to consider decreasing their pesticide and fertilizer applications. Entomologist Gordon Andrews at the Delta Research and Extension Center in Stoneville, Miss., suggests growers look closely at every input application and analyze the yield loss or gain associated with that expense.

That may mean making do with cotton fields that are a little weedy.

“Cotton fields don’t’ need to be pristinely clean,” Cooke says. “Occasional clumps of johnsongrass, or lower level grasses late in the season, aren’t going to reduce your cotton yield. In a normal year, you’d want to kill these grasses to prevent seed development, but this isn’t a normal year, and you may not be here next year. The most important thing we’ve got to do now is think about surviving.”

When it comes to deciding when to stop making insecticide applications in 2002, Cooke says growers need to follow the Node Above Wide Flower plus 350-heat units rule. “Cotton growers need to worship that rule this year. Even with government payments, that top crop isn’t going to be worth the cost of an insect control operation.”

Cooke adds, “Farmers probably have some residual, or carry-over, nitrogen in their cotton fields, and they probably don’t need as much this year as they’ve been using to make the same yield. I don’t mean they should dramatically cut-back on their fertilizer applications, but reducing their nitrogen rates is another small way to cut production costs.”

Cost-conscious cotton growers may also want to delay their defoliation treatment, to avoid the need for a second defoliation treatment. “It’s dependent on weather, but certainly if I had cotton ready to defoliate the 15th or 20th of September I’d wait a week. I wouldn’t wait though, if the crop wasn’t ready to defoliate until the first week of October,” he says.

Other potentially economic production systems researchers are investigating include corn-cotton rotations, and alternative insect control application methods.

Steve Martin, another Delta Research and Extension Center economist, recently finished a cotton-corn rotation study. The results, he says, are extremely promising.

“After one year of corn, the rotation boosted cotton yields 15 percent over continuous cotton yields. Based on our budgets, the rotation always amounted to increased returns over continuous cotton,” he says.

An added benefit of the system, Martin says, is that a cotton-corn production system seems to be extremely well suited to no-till. “The cotton yields better, and this system can spread out your field operations, further decreasing labor and tractor requirements.”

Perhaps one of the most promising systems Cooke and his fellow researchers are evaluating is the full-season application of insect control products applied on a 20-inch band with ground applicators.

The joint on-farm project with USDA’s Agricultural Research Service is in its third year, and Andrews says early results show that applying insecticides on a 20-inch band can reduce insecticide costs by as much as 50 percent.

The first year of the study, the system provided the exact same yield as the control farm, and reduced insect control costs by 50 percent. The second year, in the face of very heavy tarnished plant bug pressure, three farms realized a 50 percent cost-savings, and two farms made slightly more cotton with the conventional system. “Slightly higher yields with broadcast insecticide applications resulted in a more favorable response on these two farms in 2000, but we think that may have had something to do with the weather and the plant bug pressure,” Andrews says.

Growers need to not only think about growing their crops cheaper, they need to consider putting their marginal cotton land in cheaper crops, Cooke says. “I’m not advocating that growers quit growing cotton. I’m advocating that you grow cotton only on your best cotton ground.”

Mississippi Extension cotton specialist Will McCarty says, “Producers must do everything possible to reduce costs, reduce trips across the field, and try to survive 2002. Take a hard look at every operation, and if you aren’t sure it is necessary then eliminate it.”

“The normal way a farmer deals with low prices is to forego new tractors and maintenance costs,” says Martin. “The problem is farmers have been slashing their costs for the last few years, and in most cases can’t cut further.”

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