As cotton acres shrink, gins vanish in state

15 years see 60 closings as farms pick easier crops

A cotton picker moves through a field in October 2014 in Craighead County. About 1 million acres of cotton were planted in Arkansas in 2000; this year’s projection is 330,000.
A cotton picker moves through a field in October 2014 in Craighead County. About 1 million acres of cotton were planted in Arkansas in 2000; this year’s projection is 330,000.

Cotton gins, one of the most visible symbols of the state's cotton industry, have dwindled to about a third of their previous number as farmers abandon cotton for more profitable crops.

Modern cotton gins are housed in large warehouses mostly in the state's eastern cotton-producing region. The number of gins in the state has fallen from 86 to 26 in the past 15 years. Nine gins closed in Arkansas in 2014 alone, according to an annual survey by the National Agricultural Statistics Service.

"Back when I was a young man I can remember 15 to 16 cotton gins in eastern Clay County," said Terry Holland, a farmer who has grown cotton for about 30 years. "Now there's one."

The upkeep for gins is expensive, and many gin owners found it wasn't worth it to modernize the infrastructure needed to produce cotton as acreage decreased.

"Updating and improving gins went out as cotton got scarcer and scarcer," Holland said.

About 1 million acres of cotton were planted in Arkansas in 2000. Now that number has fallen to a projected 330,000 acres for 2016, according to data from the U.S. Department of Agriculture.

"The state's cotton industry has never seen an extended period of acreage reduction quite like we've seen since 2000," said Scott Stiles, extension economist for the University of Arkansas System's Agriculture Division.

Farmers now plant more crops that can boost bottom lines, including soybeans, in the fields that once grew cotton.

"We saw the prices go up in other commodities," said Nathan Reed, a row-crop farmer in the Arkansas Delta. "Not so in cotton."

Reed farms land in Lee and St. Francis counties. About 60 percent of his land is used for cotton. He also plants rice, corn, wheat and rye.

Cotton is expensive to grow, he said. The equipment and infrastructure is specialized, so starting to grow cotton can require a lot of money upfront.

A cotton picker will cost a farmer around $700,000, he said. Unlike combines, farm equipment that's also expensive but can help farmers with different kinds of crops, cotton pickers are only used for cotton production.

"It takes a whole different set of machinery to grow cotton," Reed said. "A lot of farmers sold their old pickers and didn't make the investment in a new one."

Reed said it takes about 2,000 acres of cotton to make the investment profitable.

"It's not something you jump in and out of," he said. "Once we lose the cotton acreage, it's really difficult to get it back. You have a whole infrastructure surrounding cotton production."

Bill Robertson, cotton agronomist at the UA Agriculture Division's Research and Extension Service, said cotton is making a short-term rebound this year. Cotton acreage hit a low last year at 210,000 acres. This year, projections put the acreage at 330,000 acres.

"A lot of areas don't have that amount of flexibility," he said. "We are very fortunate to be able to do that, but it is hard on the infrastructure."

He said a lot of the gins in Arkansas will have double the acreage commitment they did last year.

Stiles said it is possible some gins will reopen this year with the increased cotton acreage.

"The decision to restart these gins will depend on how much cotton acreage rebounds locally," he said.

Gins in Arkansas are owned privately or by farmer co-ops. The farmer maintains ownership of the cotton throughout the process, but the gin gets the cottonseed and provides the farmer with a rebate for the seeds. Cotton seeds are sold to produce oil, which can be used like soybean oil for cooking or in other food products.

"As soybean prices go up, so do cotton seed prices," Robertson said. "So that helps offset costs."

As of last week, cotton planting was about 85 percent complete, he said.

"They plant the crop they think they can do best in," he said. "People are just trying to stay in business."

SundayMonday Business on 05/22/2016

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