Challenging Commodity Prices

This time of the year finds most farmers attending meetings with representatives from seed companies and gathering data on new varieties that might be under consideration for the upcoming planting year. Doug Pustejovsky is a district sales manager for Americot Cotton Seed.

“If you back thirty or forty years and you have a cotton meeting or a corn meeting or a seed meeting we’re always talking about high input costs and low commodity prices. And so I don’t know that much has changed, but your point about the stakes are higher I agree with. Everything costs more, equipment, seed, fertilizer, so there is some truth to that and we are dealing with low commodity prices.”

Pustejovsky says with depressed cotton prices, it’s hard to pencil in cotton as being profitable next year.

“All seed, in general, is expensive, so what I would do is make sure your expected outcome would maximize your revenue, and that really has to do with quality. So you want a good stable yielder, and you want the highest quality from a staple and a strength standpoint, so you’ll have a sellable commodity that will hopefully sell at a premium.”

Yields for all crops have increased dramatically in the last twenty years.

“Part of that would be technology-driven. The other side is still genetics. I would say the traits do a really good job of protecting that yield, but you still gotta do your job as far as management and water and fertility and then all these companies and certainly the company that I’m a part of, we pride ourselves on bringing new genetics. And so that’s the other part of the equation. New genetics drive more yield. And the technology really protects that yield.”

The problem is that even with increased yields, many commodities are selling at prices that they were twenty years ago and that’s the challenge our farmers face today.