Some cotton farmers are feeling the burn as corn farming for ethanol production has become a more profitable option than cotton farming as a result of an increased demand for alternative fuels.The world’s largest cotton trading company Allenberg Cotton Co. is discussing a possible merger with rival company Dunavant Enterprises Inc. as an unstable economy has called for action to be taken in order to stay afloat.
The possible merger – expected to be completed within the quarter – is an effort to increase global cotton operations according to Allenberg’s CEO Joseph Nicosia. In July, US farmers received an average price of 45.8 cents per pound for their cotton, down 31% from the average price of 66.2 cents a pound reaped in July 2008.
As the US continues to push for more alternative energy methods to be utilized, many farmers have started to plant less cotton and more corn to aid in the implementation of biofuels. US farmers this spring planted the smallest amount of cotton since 1983: 9.05 million acres, which is down 4.4% from the 9.47 million acres planted last year.