LEACHVILLE (KAIT) In theory the purchase and sale of cotton works from the buyer to the ginner to the farmer. A triangle, each leg supporting the other. But when one leg collapses financially, the other two are left with a very shaky stance.
Gordon Miller a Leachville cotton farmer thought he had his cotton sold at 95 cents a pound. "I had it sold with Reinhart and they filed bankruptcy last week."
The falling prices began with excess cotton trading in the spring.
Ronnie Kennett, Adams Land Company, "I understand there was about 9 times more cotton being traded than cotton being produced. This caused a lock up in the market, no one could buy or sell."
Reinhart had used anticipated profits against bank loans, when the banks called in their loans, Reinhart defaulted to the tune of millions and farmers were left to fend for themselves.
Kennett. "The farmer is caught flat footed. He is now having to take his cotton and do whatever he can do with it. And that's primarily to go into the government loan which we have been doing for the past ten years."
The government loan on cotton will not make the farmers enough to cover expenses which can run over 500 dollars an acre to grow.
Miller is going to buy a new piece of equipment for next year.
Miller, "I've already ordered a combine. Gonna have about half soybeans, half cotton. The cost of inputs are about 25 to 30% what they are for cotton."