Mississippi farmers sold only 27 percent of their crop forward, and U. S. farmers sold 21 percent. But these figures don't tell the true story. Farmers are reluctant to sell on a down market, and the market went from a December futures high on March 21 of 72.05 cents to a low on December 6 of 49.10 cents, more than 20 cents. However, wise managers who forward priced at least a portion of their crops at a profitable price early in the year avoided the full impact of the sharp drop in market price. Mississippi growers contracted nearly 50 percent of the 1978 crop.
Growers become much more active in both call and fixed price contracts as prices move upward.
Few contracts are made when prices are expected to decease. In all business transactions, perhaps the most important single factor in contracting cotton is the person or firm with whom you are doing business. Even the most detailed contract can't cover every situation. The attitude of the person you deal with, his integrity, and his sense of fairness can mean the difference between a successful and enjoyable experience or one that is aggravating. Factors you should consider are price, reputation of the individual or firm, your banker's or attorney's advice, and your personal contact with the individual or firm.