LUBBOCK, Texas — As cotton prices peaked at a 10-year high of $1.07 per pound Tuesday, local farmers were hesitant to call it a boom for business.
The unusual price spike comes as other cotton-growing areas have experienced droughts that lowered crop yields this season. Here on the South Plains, however, farmers have enjoyed the best harvest in years. That leaves them skeptical of how long the price will last.
Steven Brosch, the owner of Slaton’s 6,500-acre Brosch Farms, has been growing cotton his entire life. He says the current price is “too high.”
“Whenever you start getting these large swings, take it while you can, but hold on,” Brosch said. “Cautiously optimistic, I’ve used that word several times this year.”
Brosch worries the high prices will turn away mills that may favor a cheaper material to manufacture clothing products, such as polyester.
“It’s a short-term gain, long-term loss,” he said. “Once you get above a dollar that starts cutting into your demand.”
Brosch said the ideal price for a pound of cotton is within the 70 to 80 cent range, with at least 60 cents necessary to break even after input costs. Prices have not been this high since March 2011, when cotton broke two dollars and quickly subsided to normal levels by July.
As the largest producer of cotton in the world, the South Plains region is especially sensitive to the price of cotton. As farmers begin to harvest a successful year’s crop in the next three weeks, they hope to see a market price that will turn a larger profit while ensuring demand continues.
“We like to see getting more for each pound of cotton we make, absolutely,” Brosch said. “But there is a breaking point that we know. It’s just getting too high. Things are starting to get out of whack. And they will correct themselves… we better be holding on because the bottom is going to fall back out of this.”