Several misconceptions here.
1. Cotton indeed was an up and down crop. It hit bottom about 1845 @ .06, but by 1860 was at .11, which was significantly higher than the average of the previous two decades. Thus fieldhand slaves, the primary unit of production, topped out in early 1860 at $1800, which wouldn't make sense if the crops this human "machine" produced weren't profitable. See the chart at http://www.newton.mec.edu/angier/ferguson/ferguson96-97/railroad/Slavechart.html
2. The Confederate government implemented an embargo of cotton sales under the mistaken impression that cutting off raw materials to the European factories would force the French and British governments to break the Union blockade or even ally themselves with the Confederacy, not because cotton wasn't profitable. Possibly their single biggest mistake, after secession itself, since throughout 1861 the Union blockade wasn't yet very effective and enormous quantities of cotton could have been sold and used to import arms and other necessities.
What the southern leaders didn't realize was that most English factory workers were willing to undergo the greatest privation rather than do anything to support a slaveholding system, and the enormous market price of cotton after the blockade took hold quickly stimulated alternate centers of production, notably in Egypt and India.
In addition, the restriction on supply caused by the very existence of the blockade (however ineffective) would have inherently driven the market price upward, especially taking into account nervous manufacturers who wanted to hoard supplies for a highly uncertain future. I haven't been able to find a source, but I bet the market price of cotton climbed dramatically throughout 1861.
In common with other mistakes the South made, this indicates a grave inability to see facts clearly. They fell prey to the very common mistake of believing their own propaganda about the world-shaking power of "King Cotton." (Not to mention the ability of one southerner to whip any necessary number of Yankees in battle.)
....that's an interesting point...I once heard a story that Judah Benjamin wanted Richmond to buy the entire cotton crop of 1861 and ship it out immediately to England....there it would be placed in bonded warehouses and used as a line of credit for supplies....Benjamin knew that to delay would be fatal, but he never could sell his idea, and by the fall of 1862 it was too late...
.....our family were planters in Clarendon County, SC and after the war we didn't do too well as there was no money to be had for guano and draft animals were quite scarce....some slaves came back because they had no place to go and worked on shares.....after the army worms hit, we got out of the cotton business....S.C. could have come back a lot quicker if they could have sold all the cotton that was blockaded up in Charleston but the North seized it as war reparations.. Stonewalls