Cotton makes way back as strong cash crop, creates new jobs

KINGS COUNTY, Calif. —King Cotton is back.

More than a decade after "white gold" started losing its luster, booming commodity prices have farmers cashing in on growing export demands — and have turned great swaths of farmland a snowy white during harvest season.

Cotton-picking machines chug across old vegetable fields, former vineyards and land long fallow. Stacks of Pima cotton, as long as a semitrailer, stand row upon row as far as the eye can see, waiting to be shipped to mills and turned into Jockey underwear, Fieldcrest towels or L.L. Bean shirts.

The bits of white debris dusting the sky and lying on the side of the road, lost on the drive from field to port, hardly seem a blight. Instead, in towns such as Huron, Lemoore and Firebaugh where joblessness has soared, they are signs of hope returned.

Cotton gins at once-shuttered plants rumbled back to life. Machine shops are recruiting mechanics who understand the underpinnings of Boll Buggys and cotton strippers. Seed salesmen are scrambling to keep up with orders from farmers eager for spring to come to their gold-green expanse.

"It feels so good to think that things could be good again," said Kathy Neves, office manager of Huron Ginning Co., which rehired 30 workers and turned its machines back on this fall.

Although California's current production numbers are a pittance compared with the 1990s, when more than 1 million acres of cotton flourished, farmers are ramping up — particularly in the San Joaquin Valley, historically the heart of the state's cotton industry.

Growers were expected to plant a total of 309,000 acres of Pima and upland cotton this year, up from 201,000 last year, according to the U.S. Department of Agriculture's Economic Research Service.

A similar movement is happening in the South, Southwest and elsewhere in rural America. Nationwide, the total acreage of cotton planted grew nearly 21 percent this year to 11.04 million acres. The amount of cotton harvested jumped 51 percent.

The increases are being driven in part by short supplies caused by poor weather in major producing regions overseas and robust demand from emerging markets such as China and India. Prices surged in the summer and fall as the USDA forecast that cotton stockpiles in China — the world's biggest user and importer — would be the tightest in more than a decade.

Investors and speculators, already in the rising commodity markets as a hedge against inflation and the risk of further devaluation of the dollar and other paper currencies, have raced to embrace cotton.

It's a radical shift from the depths of the recession just two years ago, when the textile industry collapsed as consumers cut back their spending on luxury goods.

In November 2008, benchmark cotton futures plunged to 37 cents a pound, the lowest since 2002. Now, the price has more than tripled, remaining near last month's high of $1.57.

"The pendulum for cotton tends to swing very widely, but I've never seen anything like this," said Sharon C. Johnson, a senior cotton analyst at Penson Futures, a brokerage firm based in Chicago. "I don't think it's going to change anytime soon. It's going to take two years of strong production to have things level out, meaning it will take that long before world stockpiles — and therefore prices — return to a semi-normal level."

The effects are rippling from financial trading floors to the sales floor of Thomason Tractor Co. in Firebaugh, 221 miles northwest of Los Angeles. Business is brisk. It has sold five harvesters in the past month, pulling in about $2.5 million in sales. Steve Malanca, the general manager, hired two mechanics to handle the growing stream of service calls for cotton machinery.

One local farmer, who had sworn off the crop years ago, needed someone to reassemble his cotton planter, Malanca said. "There were parts laying in a shack, others stacked elsewhere outside. He said, 'I need you to put it together. I gotta plant cotton in May.' "

The price run-up isn't good news for everyone: Analysts caution that starting next year, U.S. consumers will probably be paying more for their shirts, sheets and socks.

Gap, J.C. Penney and other retailers have warned that the rise in cotton prices means they may have to pay Chinese suppliers at least 20 percent more for clothing. How much of that cost will trickle down to the retail shelves is uncertain.