Workshop Addresses "Pricing Cotton In Today’s Volatile Market"

 

By Steve Byrns

Texas AgriLife Extension Service

Lubbock (July 18, 2008) - On Wednesday, July 23, the Texas AgriLife Extension Service will conduct a cotton profitability workshop from 10:30 a.m.- 4:30 p.m. at the Texas AgriLife Research and Extension Center at Lubbock.

Jackie Smith, AgriLife Extension economist at Lubbock, said the workshop will offer pricing strategies for today’s volatile cotton market. Other topics will include the expected break-even price for this year’s crop, the effect of market volatility on premiums and margin costs, and how margins are set and adjusted as price and volatility change.

“Hedging with cotton futures and options has become more challenging than ever,” Smith said. “The increase in volatility of the cotton market, as well as the other commodity markets, has made it expensive and difficult to use option contracts to lock in a profit.

“There seems to be very little reason to believe the volatility will go away any time soon. Because of huge expected carryover stocks, the cotton market is not experiencing the record prices of the grain markets. That’s why cotton farmers have a greater need to be prepared to take advantage of any favorable pricing opportunities when they occur.”

Smith said the workshop’s speakers will explore pricing strategies and the management of these strategies under different market scenarios.

Individual registration, which includes lunch, is $20 at the door.

The AgriLife Center is located on U.S. Highway 1294, half a mile east of Interstate 27, just north of the Lubbock International Airport.

For more information call Wendy at 806-746-6101.