Every day for almost a quarter of a century, O.A. Cleveland put his reputation on the line, offering insight on the cotton market and recommending pricing strategies to growers. Many times, he was right about the market. Sometimes, he was wrong. But it's hardly ever been dull for the retiring Extension economist at Mississippi State University.
In honing his marketing knowledge, the economist has visited the textile mills of Asia and cotton-growing regions all over the world, including Uzbekistan, China and Australia. During that time, he's seen the cotton market blindsided by psychology and rocked by world, and even local, events. He's seen prices of well over a dollar fall to 45 cents in less than three years.
While Cleveland is retiring from MSU, he's not abandoning the chaos of the market or Mid-South cotton growers. He'll continue to write his weekly column, now posted on a Website, cottonexperts.com, sponsored by Aventis. He'll teach a class at MSU and offer a consulting service for farmers.
But he does plan to spend more time with his wife of 30 years, Martha, and getting to know his twin grandchildren.
And they him.
Cleveland has been on the go since 1975, when he took a job as an economist with USDA's Economic Research Service. Stationed in Stoneville, Miss., most of his work was centered around cotton - ginning, warehousing and the marketing process. After finishing his doctorate, he took a position with the MSU Cooperative Extension Service in August 1977.
Over the first five years in Starkville, he worked in cotton, soybeans and rice. He started writing a weekly marketing report in 1981. The report "started out as a one-paragraph synopsis of the markets that we provided to the director of the Extension Service," Cleveland said. "Over time, it grew to a newsletter that went out to anybody that was there to read it."
In 1988, anyone who read his predictions of higher prices would have thanked him. "The market was extremely bearish on the heels of the Tiananmen Square incident in China," Cleveland recalled. "Luckily, I had been suggesting that prices should start moving considerably higher. We starting seeing that in late March 1989. They moved higher until early 1990, reaching to above 90 cents. That was a good call."
In the early 1990s, he learned to never underestimate market psychology. "A big surprise was the Julian Company incident (a legal situation involving a Memphis cotton merchant). The fundamentals of the market were very positive, however, we got a lesson in the psychological indicators of the futures market - how a market over-reacts.
"In that case, the market went 5 to 7 cents lower than the fundamentals would have suggested. It regained it very quickly, but it caught a number of people in a very difficult situation."
There were times when the market reminded the economist that he was indeed, human. The payment-in-kind (PIK) agricultural policy of 1984 was such an example.
"It appeared that acreage would be reasonably high and the market would have difficulty recouping. I started out the year believing that growers needed to do a little pricing. In hindsight, you see everything so clearly."
As it turned out, there was not enough cotton in the world because of the PIK situation. "Prices went up 10 to 12 cents higher than I thought they would go. That to me was one of the biggest misses I had. Of course, there are a lot of folks who say it's every year. That was definitely one of the formative years."
There were times when he wished growers had paid more attention to his predictions. "We saw the market move to nearly $1.20 a pound in the summer of 1995. Producers remembered that and they could not break away from the mentality that prices were going to be a dollar again, that prices had permanently moved to a much higher plateau.
"In the spring of 1996 and 1997, producers held old crop cotton, and as a result of that, they really took a beating. There were some high averages when we looked at the futures market. But because the market realized that growers were holding cotton, the cash prices dovetailed considerably. To me, it was a failure of my education program to get farmers to think more about risk management and think less about greed."
The most gratifying part of Cleveland's experience was enlisting the support of the New York Cotton Exchange "to become a full partner in the risk management education of cotton growers. We had a meeting with them in the mid-1980s and they just opened their arms to Mississippi and other cotton states, and offered to give us support any way they could."
Through the years, Cleveland has relied on two major independent resources to help him understand the markets, USDA's market information and the International Cotton Advisory Committee (ICAC).
"I look at the world supply-demand situation. Then I break that down into the individual countries, looking at the major producers and major consumers first and how things going on there may impact supply and demand."
And there's the emerging China factor. "When China is a net importer of cotton, they will probably account for 60 to 70 percent of the variation in cotton prices. When they are not a net importer, price variability in cotton decreases."
Cleveland believes that high cotton prices will come around again, "but they'll be very sporadic. It's a cycle. We'll get back to the 70s and 80s. But those years will be very few and it will take some combination of good demand and some weather disasters in a number of high-production countries. By and large, we have to think of cotton futures trading between 68 cents and 78 cents a pound. That will be the typical range over time."
Now that he's retiring, Cleveland will try to limit his office time to when the markets are open, between 9:30 a.m. and 2 p.m., so he can spend more time with his family.
Cleveland has a son, O.A. Cleveland Jr., known as "Tres," who is a law student at Ole Miss, of which he jokes, "I hate to admit that."
He has a daughter, Chris Charlton, who is assistant housing director at the University of Central Arkansas, in Conway, and the mother of twin 17-month-old girls. "I will spend more time with my grandchildren. They're lots of fun."
Cleveland will continue to play golf twice a year, "whether I like it not. I play at some of the best courses in the United States. I tend to play at various cotton meetings, just for fellowship with the cotton folks."
Apparently, there is some room for improvement in this aspect of Cleveland's life. "My wife asked a golfer friend of ours about getting me some new clubs. His reply was, `No, get him lessons.'"