Business

Hurricane Michael Destroys A Lot Of Georgia, SC Cotton

Hurricane Michale has destroyed a lot of cotton crop along the coast of Georgia, South Carolina, and other regions. According to American media reports, many farmers have reported to have lost most of their cotton crops long the coast. There are also reports from farmers in South Alabama, Florida, and Georgia who have lost their entire cotton crop.

Since cotton season has already started many of the farmers were ready for harvest. Now that the crops are gone farmers are waiting to see how it will impact market prices.

"Should it affect the price? Possibly. But it's such a global market now that there could and could not be a price increase because of the lost bales of cotton," contemplate farmers.

Many farmers had already sold their crops prior to harvest and now they don't have any product to deliver. Farmers do insure their crops in case of disasters like Hurricane Michael, but even then it likely won't help much. According to experts,

"Insurance is just something that maybe will help get them some money back to where they started possibly, but it's definitely not going to be a fix all." Farmers who didn't lose their crops will still likely face hardships selling their cotton if the storm caused damage such as stains from mud or leaves.

Cotton appears to have been hit especially hard. The winds blew the cotton off the plants. According to some farmers, they saw photos from one field where a farmer had been harvesting up until the last minute. The storm picked the cotton off the plants about as thoroughly as the harvester. "You couldn't tell the difference from where he had stopped picking," they said.

The US agriculture department said they won't know the full extent of the damage Hurricane Michael caused until some time in December.

Hurricane Michael, a powerful, fast-moving storm headed northward to Panama City, Florida, could not have come at a worse time for Southern cotton farmers. The harvest has just begun and 90% or more of the crop remains in the fields. Georgia ranks second in the United States in cotton acreage and second in production per acre. The overall value of the crop in 2017 was nearly US$ 870 million.

The path of the storm almost perfectly tracks the 'Cotton Belt' running southwest-northeast south of Atlanta in Georgia and through the east-central region of South Carolina. Cotton plants remaining in the fields are at risk to both wind and water damage.

Heavy rain can have a range of effects on cotton plants, depending on how close they are to being harvested. First, wet cotton cannot be harvested; farmers must wait for it to dry. Even a five minute shower can delay a harvest by an hour. Violent rains can string out the cotton and even rip it from the bolls. The most common effect is that rain soaks cotton in open bolls, causing deterioration and discoloration, which lowers the grade and value of the cotton. The most commonly traded cotton futures contract, ICE Cotton #2, must meet a grade of 'strict low middling', which is light and white, not dark gray or yellow.

"We are looking at a quality and a yield damage likely, the most risk is coming when the cotton is opening bolls," said Ted Seifried of Zaner Ag Hedge, referring to Florence's impact on North Carolina. When Florence hit, a much smaller percentage of the bolls were open, and North Carolina accounts for far less of the United States' total cotton production than does Georgia.