Cotton rebound

He needs a jumbo card to list hats he wears out of North Valley Gin on the outskirts of Sutter, Calif.

Amarel keeps busy in the northern reaches of the

Cotton Belt:
• Managing the Valley’s lone cotton gin
• Farming 600 acres
• Overseeing the custom harvest of another 1,000 acres
• Helping many of the 20 Northern California cotton growers market their crops
• Negotiating planting seed contracts.

Doug Munier, University of California Cooperative Extension farm advisor in Glen County, said Amarel also spends a lot of time teaching new growers the finer points of growing cotton.
“Mel does a good job for his growers. He understands cotton,” said Munier, who was a farm advisor in Kern County before moving north 15 years ago, taking with him years of cotton experience from the southern San Joaquin Valley.

There were just 1,000 acres harvested in 1995 when cotton returned to the Valley after a commercial absence of more than 70 years. It peaked at more than 22,000 in 2001. Many thought it had the potential to reach 100,000 acres or more in the northern Valley.

However, like the rest of the U.S. Cotton Belt, the fiber crop fell on hard times. Acreage began to decline, a casualty of low prices and competition from more profitable crops. It fell to its lowest level in the Sacramento Valley last year, when only 2,250 acres were planted.

And like the rest of the U.S., cotton has rebounded there this season, more than doubling last year’s acreage.

North Valley Gin is locally owned by Amarel and his partners. A larger gin once operated in the Valley.

When the acreage decline started, a trio of managers representing the larger gin took Amarel to lunch and offered to buy him out. He offered to buy them out. They responded they would run Amarel and North Valley out of business.

“I told them they wouldn’t drive me out of business. They said, ‘why?’ and I said because there are three of you doing what I do alone, and besides you are buying lunch,” he laughs.

The other gin closed three years ago.
There are almost 5,000 acres in Glenn, Colusa and Sutter counties this year. Amarel expects to gin 14,000 to 15,000 bales this fall. Yields may be off from last year’s 3.3 gin average, but he is confident his 20 growers can bring in a good crop. Many are seasoned cotton producers, dating back more than 15 years as north country cotton growers. Four are new cotton producers this year.

Modern day cotton in the Valley actually dates to 1976. That is when the late Buel Mouser, then the Chico State University farm manager and later school ag professor, started growing cotton on the school farm. When he retired, he wrote a research paper detailing what he had learned about growing cotton in the Sacramento Valley. His report sparked grower interest in cotton as an alternative crop. The first farmer crop was grown in the mid 1990s.

It was a rough start, primarily because of 2,4D drift issues from

rice to cotton. Cotton is very susceptible to 2,4D aerial drift and rice growers resented the introduction of the crop. A second concern was the feared spread of verticillium wilt from cotton to olives. Cotton is still banned from certain areas of the Valley because of that issue, even though olives and cotton have long co-existed side-by-side in the San Joaquin Valley, and research has shown cotton poses no threat to NorCal olives.

Survival of cotton in the Sacramento Valley is a surprise to many with such small acreage and one gin. “I am not really surprised cotton’s still here. It may be a little more difficult to grow than some other crops. The season is longer than other North Valley crops.

“However, the revenue has been there year after year. There have been ups and downs, but cotton has been fairly consistent through it all,” he says.

SJV Acalas and even Pimas have been tried in the north, but it has been uplands that have been consistent. “No one wants to pick cotton at Christmas time,” he laughs.

The 2010 rebound has come with 80-cent cotton and lucrative seed contracts Amarel has negotiated for his growers the past few years.

Spinning industry demands lift of duty, quota on yarn

Spinning industry owners met the government last week to ensure that, quota and duty imposed on yarn exports is lifted by July 26.

But the value-added textile sector wants the government to continue with the duty imposition on yarn, for another year.Crisis surrounding yarn has not yet been solved, despite several policy measures taken up by the Textile Ministry, to ensure yarn is available at reduced rates.Now, while the value-added textile segment complains about dearth in yarn clubbed with increased yarn prices, spinning industry owners are blaming the government of fraudulently playing with the open market economy and denying the spinners opportunities for export, via imposition of restrictions and duties on exports of yarn.

During a meeting of the value-added segment with the Prime Minister, Yousuf Raza Gilani and Textile Minister, Rana Farooq, they demanded that, the government continues with the imposition of duty on yarn. In addition, they have also demanded for a three years freeze on about Rs 300 billion debt of the value-added segment and a bailout package, just like the defunct industries received during the late 90s.

But, the certain associations did meet the Finance Minister to get an assurance that, the temporary restrictions and duties on exports of yarn, which expire on July 26, are not given an extension. But they did not receive any, as he refrained from giving any promises.Deliveries made in the month of June are at a much lower rate than the rates at which yarn is currently being supplied to the local industry. This is because, exports of yarn carried out in the last week of June, were made due to the Letters of Credits (LCs), which were opened prior to May 13, as shipments post it were held back for over a month by the government.

The current export price of yarn in the international market stands at Rs 127 a pound as compared to Rs 115 a pound, which was practiced in the domestic market.As per a spinner and knitwear exporter, the apparel segment was under tremendous stress over the last nine months, owing to contracts, which were inked at reduced prices. But the new deals are being inked at 20 percent higher prices.

Moreover, with the current rate of cotton at Rs 6,700 a maund, the cost of producing yarn has also surged to Rs 120 a pound.As of now, spinning industry owners are supplying yarn to the domestic industry at a rate of Rs 110-115 per pound, which has lead them to register a daily loss of Rs 300,000 – 500,000, in anticipation that things might change.