By Frank Giles
When Kent Fountain was elected Chairman of the National Cotton Council (NCC) during its annual meeting in New Orleans this February, it was just becoming clear that COVID-19 would create global market disruptions. The positive bump in cotton prices resulting from the Phase 1 of the trade agreement with China was erased by concerns over the virus.
“We will be monitoring trade and the market as the coronavirus takes its course,” Fountain says. “How will it impact China’s textile industry? Will we be able to ship cotton to China? We hope the market returns to normal and coronavirus doesn’t hold us back, but this is uncharted territory.”
Fountain has seen cotton’s ups and downs firsthand and, as a ginner and grower, has always been a market watcher. The cotton resurgence in Georgia in 1995 was what led Fountain to build a gin in Surrency, GA. Around 2000, he also began farming cotton and peanuts.
The change in the peanut program in the 2002 Farm Bill prompted Fountain to add a peanut buying point in 2003. His company currently operates under the Southeastern Gin and Peanut Company banner.
“In 2015, we went in with seven other peanut buying points to build the Premium Peanut shelling plant cooperative in Douglas, GA,” he says. “It is the world’s largest shelling plant in a single location.”
Fountain credits the NCC with establishing long-lasting friendships over the years and introducing him to advocacy via various industry associations. “With the resurgence of cotton in the mid-90s, the NCC decided to invite all the new ginners to attend its annual meeting in 1996,” he says. “That’s where I met a fellow ginner from Georgia, Ronnie Lee, who became a friend and also has been active in the NCC over the years. That first meeting introduced me to the Council, and it has been a progression of industry involvement ever since.”
National Cotton Council President/CEO Gary Adams says Fountain, who was a participant in the Council’s 2001 Cotton Leadership Program, comes into the Chairman’s position very well qualified.
“Kent has been an effective and tireless leader for the U.S. cotton industry, having served with distinction as Council Vice Chairman during 2019,” Adams says. “He also has served on numerous committees of the Council and gained leadership experience on several other organizations, among them Cotton Council International, the National Cotton Ginners Association and the Cotton Growers Warehouse Association.”
Trade Tops Agenda
Fountain says trade and markets will be a major focus of the NCC in 2020. While there have been positive developments since 2017 with the addition of seed cotton back into commodity programs, disruptions have occurred.
The announcements of the tariffs between China and U.S. decimated prices and the markets. “We had been dealing with a depressed market for six and seven years, but saw prices begin to go back up in 2018,” Fountain says. “The day the President announced the tariffs, we had 94-cent cotton. That is where we need to be, but we have seen prices slip back by 30 cents or more since then.”
With the effects of the coronavirus on the market, there was a lot of interest in the possibility of a third round of market facilitation program (MFP) payments during the Council’s annual meeting. While that possibility has fluctuated between “no” and “maybe” from Administration officials since the meeting, Fountain says the first two payments were critical to commodity crop growers.
“What the MFP did, along with putting cotton back into the commodity program, it gave my grower customers a safety net that allowed them to stay in business,” he says. “Several of my growers would not be farming today if not for the money those two programs provided.
“The council will be monitoring the situation closely. If we don’t see the market bounce back or shipments to China materialize, then we will be asking for and supporting MFP 3.0. Of course, everyone would like the market to take care of this on its own, but these outside market forces [tariffs and coronavirus] make it difficult to do so.”
Cutting Contamination
The lack of contamination in U.S. cotton fiber has always been a point of differentiation against other growing regions in the world. But that reputation has slipped in recent years with plastic contamination becoming more of a problem. Fountain says it will remain a focus of the NCC in the coming year.
“We have always had plastic whether from mulch or bags, but the quantity has gone up with the proliferation of round bale wraps,” Fountain says. “We are putting a lot attention on this problem. In fact, we recently tested the first commercial technology to help kick plastic out of cotton at our gin. It’s called Viper and it uses cameras to identify the plastic and air knives to blow it out on the lint slide. The test went very well; even better than we expected.”
Sustainability
The push to prove the sustainability of cotton and its production practices has become a larger and more pressing issue in recent years. Programs like the U.S. Cotton Trust Protocol aim to take a proactive approach to the demands by retail brands when it comes to sustainability.
“Sustainability is a huge issue, probably in the top three of our industry priorities at the NCC,” Fountain says. “It is critical we get these programs rolled out and help growers understand why it important to register and certify their sustainable practices. We are doing these things anyway. We just need to verify it. This is becoming very important to our buyers here and overseas, especially in Europe. The issue of sustainability is not going to go away, so we need to be proactive.”
Labor Challenges
Sourcing labor is becoming a bigger and bigger challenge for growers and cotton ginners. It is difficult to find labor, especially the seasonal labor agriculture depends on.
“At the Council, we are monitoring proposed reforms to the H-2A visa program, which aim to make it easier to use and less expensive,” Fountain says. “Cotton gins are eligible to use the program. I have not used it for our business yet, but probably will be forced to eventually as labor gets harder to find.”
Fighting the Good Fight
Fountain says he’s excited about his stint as NCC Chairman and advocating for an industry he loves. He knows it will be a busy year.
“Outside all the other challenges, there are always lawmakers who attack our cotton programs every budget cycle, whether it is a farm bill year or not,” he says. “This usually comes from people who are not from farming and don’t have an appreciation of the multiplier effect agriculture has in our rural communities. So, we’ll have to continue to fight back those attempts and ensure our growers have a reasonable safety net during challenged times.”