Southern cotton farmers enjoy good crop - but still lose ground
Burke County, Ga.
In a clearing, five green-and-yellow cotton-picking machines sit and wait. The morning dew has not been heavy. Soon, R. L. (Bobby) Webster and his men will drive the pickers into a field where cotton plants are heavy with bolls of white fluff, glinting in the bright November sun. Most fields in east Georgia already have been picked.
The harvest looks very good this year. In Georgia - and in the much larger cotton belts of the Mississippi delta, Texas, Arizona, and California - farmers are bringing in record yields. This year an average acre will produce 613 pounds of cotton - 23 pounds more than the previous high, forecasts the US Department of Agriculture (USDA). Overall, some 13.3 million bales will be produced. That's the highest total since 1981.
But the outlook for cotton farmers like Bobby Webster is not so bountiful. Mr. Webster, in fact, has lost his farm; while Americans were voting Nov. 6, his 2,135 acres were auctioned off to pay his creditors.
To understand why Webster's experience is being repeated all too frequently, it helps to examine the impact of the good 1984 cotton crop on different groups:
Consumers. The bumper crop has resulted in lower prices for raw cotton. But that won't mean much at the checkout counter. An $18 men's dress shirt has in it only about 80 cents worth of raw cotton, the USDA estimates. A $20 pair of blue jeans contains about $2 worth of cotton. US consumers have benefited from cotton's competition with man-made fibers and a flood of textile imports. Retail clothing prices for the first five months of this year were about 13 percent cheaper than in 1980, when adjusted for inflation, according to USDA figures.
Domestic cotton mills. An abundance of low-priced cotton will help mills this year, but their future does not seem bright. The labor-intensive industry in the US will have problems competing with foreign textile producers, whose labor costs are much lower, says Terry Townsend, a USDA economist. Imports ''are having a devatating effect on the domestic textile industry,'' adds Chessley Howard, vice-chairman of the cotton Committee of the American Textile Manufacturers Institute. ''Without protection, it's going to be an extremely difficult job (to compete). A lot of companies are going under.''
Cotton farmers. In the short term, the outlook is mixed. ''Prices aren't great, but they're not too bad,'' says Ross Korves, research economist with the American Farm Bureau Federation. Add federal deficiency payments and the picture improves, says Mr. Townsend. After all expenses except land rent, the average planted acre of cotton will bring in about $15, he calculates, and nearly three-fourths of those acres will bring in, on average, another $96 an acre in government payments.
In the long term, US cotton production is expected to continue the slow decline that began decades ago. Townsend predicts output to drop from about 13 million bales this year to about 9 or 10 million in five years or so. Part of this decline, due to expanding foreign production, is shared by all farmers. Part of it, caused by the losses in domestic milling, will hurt Southeastern cotton growers especially. Unlike farmers in the West, they cannot make up losses by exporting raw cotton to Asia, Townsend says.
Some farmers, including Bobby Webster, say they feel more government intervention is needed. ''The government has failed to protect us,'' he says. ''We have no way to control our production.''
In the past, cotton was controlled by strict marketing quotas. Economists are wary of such measures, because demand for cotton is so sensitive to the price. ''You lose more in sales than you gain in price,'' says Luther Tweeten, an agricultural economist at Oklahoma State University. ''The market is an insidious mechanism. . . . It has a way of coming home to roost (with) those who try to thwart it.''
But some cotton farmers in the Southeast, scene of disastrous droughts in 1977 and 1980, are in such trouble that they are desperate for cash.
''It's just a matter of time,'' says farmer Ray De Laigle, before creditors foreclose on his farm. ''They can move in tomorrow.''
Webster, the largest cotton farmer in Burke County and chairman of the state cotton commission, has already lost his land.
''It was a rude awakening to me Wednesday morning,'' he says. ''I had a homeowner's policy. Now, I don't have a home anymore.
''It made you feel, you know, that you're not quite a man. . . . I've shed tears over this thing.''
When the droughts hit, Webster, like other farmers, borrowed to continue operating and to expand his farm. This was easy in the late '70s - credit was cheap and land values were increasing rapidly, which meant more could be borrowed against the farm.
''I borrowed because I had made money before,'' Webster says. When he started farming in 1954, he had used the money earned from 92 acres his father had given him to pay off another 178 acres.
But that strategy didn't work this time. Interest rates rose and prices didn't keep pace. Webster could not pay off his loans. He figures that if he were debt-free he could net a profit of nearly $100 an acre. But his debts were so high by the time of foreclosure - nearly $3 million - that he was paying some
''You better look real close at that interest, because it will eat you alive, '' says another Georgia cotton farmer, scratching his head. ''When it went up several years ago - 'Good Lord have mercy!' - survival became a real trick.''
Still, Webster and other farmers plan to keep farming on rented land, if possible.
''I enjoy growing cotton,'' he says ''I can go home and thank the Lord for my blessings. I hope He continues to let me grow cotton.
''Tomorrow's going to be a little bit better.''