Gaines County cotton gins are beginning to wind down their operations for the 2013 harvest season, according to the latest polling of bale count figures conducted by the Seminole Sentinel.
As of Monday, Gaines County's eight gins reported a total of 245,410 processed bales, with two gins -- Ten Hi Gin in Loop and Seminole Service Gin -- having ceased operations for the harvest year.
"Typically, by the first of the new year, the High Plains cotton harvest is all but finished," said Mary Jane Buerkle with the Plains Cotton Growers, Inc. based out of Lubbock. "However, delays throughout the harvest season kept some farmers out of the fields, meaning that Santa Claus made his annual visit before they could say the 2013 cotton crop was behind them."
Buerkle stated those delays have impacted ginning operations as well. Although some gins within the PCG's 41-county coverage area have already completed their seasons, others have a few weeks of ginning to go. Some have temporarily halted operations as producers finish their harvest.
Locally in Gaines County, spokespersons with two area gins -- Four Way Gin near Seagraves and Pioneer Gin, located in far western Gaines County -- stated they should be ceasing their respective ginning operations within one week, while several others stated they had would be completing their operations within a month.
According to Burkle, as is common during the latter stages of harvest, quality has slipped a little, but the Lubbock office still was reporting almost 60 percent at color grade 11 or 21. Bark this week was at 47.8 percent, well over the season average of 22.9. Season average length is 35.83.
In early December, the U.S. Department of Agriculture lowered its forecast for domestic cotton production, while world stockpiles are expected to be above analyst estimates.
In the 12 months started Aug. 1, 2013, output in the U.S., the world’s top exporter, will be 13.07 million bales, down from 13.11 million projected last month. The nation’s shipments are projected to be 10.40 million bales, matching the November estimate. Ending stockpiles by July 31 will be 3 million bales, unchanged from last month’s forecast.
Global cotton inventories, according to USDA officials, were expected to be 0.7 percent bigger, compared with November’s projection, according to the agency.
World stockpiles, according to Bloomberg report, was expected to be 96.41 million bales by July 31, 2013, however, on Nov. 8, 2013, the agency estimated 95.71 million. Last week, analysts surveyed by Bloomberg News expected 95.1 million, on average. The department increased its estimate for the previous marketing year’s surplus on lower consumption in India, boosting this year’s forecast.
Global production will be 116.83 million, the agency said. In November, the USDA estimated 117.22 million. Analysts anticipated 116.9 million.
PCG officials stated in their weekly "Cotton News" newsletter that according to an analyst quoted March futures contract is trading at more than seven cents higher than this time last year and was one of the top commodity markets with an overall gain of 12.6 percent for the year. March futures were trading at almost 83 cents as of press time.
According to a Dec. 29, 2013 Wall Street Journal article, U.S. cotton futures were headed for the first yearly gain since 2010 as a smaller U.S. crop and firm demand boost prices.
The price of cotton traded on the ICE Futures U.S. exchange was up 12-percent in the 2013 calender year.
The U.S., the world's biggest cotton exporter, is expected to produce 13.1 million bales of cotton, the lowest in four years, according to the U.S. Department of Agriculture. Attracted to higher returns from other crops such as corn, farmers had scaled back cotton acreage last spring by 16-percent.
Most of the current cotton crop has been harvested and either has been sold or is being prepared for export. The U.S. sells about 75-percent of the cotton it produces overseas.
"It's going to be really tight this summer for U.S. cotton, there's no doubt about it," said Jordan Lea, co-owner of Eastern Trading in Greenville, S.C., a cotton merchant.
Along with the smaller supply, demand for U.S. cotton has been strong, traders say.
In the week ended Dec. 19, U.S. export sales totaled 221,600 bales of upland cotton, the most commonly grown variety in the country. That was 6-percent lower than the previous week but still strong, considering how close it was to the Christmas holidays, when the market is usually quiet, and that prices were near a two-month high, said Sharon Johnson, an Atlanta-based senior cotton specialist at brokerage KCG Futures.
"Even in the face of higher prices, [the sales figures] are stronger than expected," Ms. Johnson said.
Cotton for delivery in March rose 1.5-percent to 84.12 cents a pound, the highest settlement price in more than two months.
"It seems to me that demand is more consistent [than last year] from a selling standpoint," Mr. Lea said.
The export sales figures released in late December were enough to counter a report from news agency Xinhua that top cotton importer China is planning to replace its system of stockpiling of the fiber with direct subsidies to its farmers.
China had been beefing up its stockpiles by buying cotton from its farmers and overseas since 2011, providing a major support for global prices this year. By the end of the 2013-14 season in July, China will have almost two-thirds of the world's cotton, according to the USDA.
However, analysts and traders anticipated that the government would be ending the stockpiling system, and the news report merely confirmed their expectations.
Prices are expected to continue climbing next year, according to Australian bank Macquarie Group Ltd.
"We expect to start 2014 constructively, given tight cash cotton supplies," the bank said in a research note. "This, along with healthy demand, could result in strong U.S. exports, leading to tighter U.S. and ex-China global stocks."