While you must use your own best method, the more successful growers tend to base their judgments on estimates of the direction and speed of price movements. These estimates come from understanding the world cotton supply and demand trends and from historical price comparisons. Complicating the cotton marketing situation is our increasing dependence on foreign demand. More than 50 percent of our cotton is exported, either as raw cotton or as cotton products. Because foreign buyers react constantly to cotton supplies and prices around the world, it's difficult to predict foreign demand for United States cotton.
American agriculture has a constantly growing appetite for credit.
It has been easy for young farmers just getting started to extend their credit to the absolute limit. In this precarious financial environment, you have too much at stake to rely on the whims of the market at harvest time. And, chances are, your lender won't let you. It's becoming harder, also, for you to rely on historical information to help anticipate cotton demands and prices. The seasonal price patterns and a knowledge of past market performance help, but these require constant adjustments as worldwide conditions change.