WEIL BROTHERS COTTON TO CLOSE AFTER 130 YEARS
MONTGOMERY, Ala. -- Weil Brothers-Cotton Incorporated of Montgomery, an international cotton merchant solely operating as an intermediary between cotton producers and cotton consumers around the world, has announced it will be closing after 130 years in business.
|According to the USDA's Nov. 10 cotton production reports, Alabama's cotton acreage declined by 25 percent this year, down to 290,000 acres -- the least since 1983.|
According to media reports, Andy Weil, who is president of the U.S. operations, said the company would close in 2010 because "risks have become too great."
``It's a very difficult and sad decision, but one we feel is the best,'' Weil, a former president of the American Cotton Shippers Association, said in an interview with Bloomburg.com. ``The risks have become too great. We've seen these risks mounting, especially in this decade. It really came to a head in March.''
In March, cotton hit a 12-year-high of 92.86 cents per pound on the International Commodity Exchange, a milestone largely due to the fact that U.S. farmers were shifting acreage away from cotton and planting more profitable grain crops like corn and wheat.
Since hitting that high mark, cotton has fallen 57 percent to a six-year low of 39.23 cents as demand for clothing and textiles plunged amid an ailing global economy. According to the USDA's Nov. 10 crop production report, cotton acreage in Alabama declined by 25 percent this year to 290,000 acres -- the least since 1983.
``Demand is in a terrible state of affairs," Weil told Bloomberg earlier this week. "When Chinese exports depend on American and Europeans economies, which are now in a recession, they have no demand for raw materials.''
According to the USDA, China, the world's largest cotton importer, canceled or delayed 34,100 bales of U.S. orders in late October.
"Like all other segments of the economy, cotton merchants have been affected too," said Buddy Adamson, director of the Alabama Farmers Federation's Cotton Division, noting that a few cotton brokers have recently declared bankruptcy and others are expected to follow. "I think it's going to have a ripple affect throughout the industry. I hate to see this happen."
Adamson said much of the industry's problems can be traced back to last winter when speculative trading artificially drove up the price of cotton. "That seems to be the straw that broke the camel's back," he said. "It caught a lot of cotton merchants off guard."
Founded in 1878, Weil Brothers-Cotton Incorporated is managed today by the great-grandsons of the founder of the company. From its inception, Weil Brothers has merchandised cotton of all growths and varieties from origins around the world for sale and delivery to consuming markets on all continents but Antarctica.