Cotton prices fall to near 5-year low - WTVM.com-Columbus, GA News Weather & Sports

Cotton prices fall to near 5-year low

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(Source: WSFA 12 News) (Source: WSFA 12 News)
(Source: WSFA 12 News) (Source: WSFA 12 News)
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Mother Nature has been good to cotton farmers so far, but the same can't be said for the market.

The price of cotton has dropped more than 20 percent just in the past few months. The price was around 85 cents per pound before Memorial Day. It's now as low as 64 cents.

The reason in the drop boils down to supply and demand.

Cotton is growing well across the country, which means supply is up, but a major buyer, China, has a lot of cotton in reserves, so demand is down.

Experts say it's the lowest they've seen in nearly five years. Just to put it in perspective, cotton was trading at 91 cents to 93 cents this time last year.

"We have had several good years with prices and it's just in a cycle where those factors coming together are pushing it down. 64 cents or 65 cents is not what we would like to see for cotton," said Brian Hardin, director of governmental and agricultural programs at Alfa.

Where the price stands now, farmers can't even come close to making a profit.

"You need above 80 cents, really upper 80's to be profitable. It's huge, it's devastating," said Shep Morris, a Montgomery and Macon County cotton farmer.

Experts say the impact goes beyond farmers. Cotton in Alabama creates more than 2,700 jobs and has an annual economic impact of nearly $300 million.

Even with the decrease, farmers believe the drop in price will turn around.

"The world will look at it and decide that's just a cheap, good buy and you will have people come back in to buy it and drive prices up," Morris said. "Also the cheaper it gets, the mill demands should pick up. There are some companies that are building new mills in the United States. They could bring some of their manufacturing technology back here and that could be a huge plus for the future economy."

Thirty-four-thousand acres of cotton were planted this year in our state. Alabama ranks 10th in cotton production in the U.S.

Copyright 2014 WSFA 12 News. All rights reserved.

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