Cotton Will Steal Acres from Variety of Crops

February 10, 2011 07:20 AM
 

With new crop cotton futures over $1.20, cotton will compete fiercely for U.S. acreage this spring, and many analysts expect it to come out a winner.

According to a recent survey by the National Cotton Council of America (NCC), U.S. growers expect to plant 12.52 million acres to cotton this year, up 14% from last year’s 10.97 million acres. The largest increase will come in the West, up 27%.
 
California pima cotton is selling for a 40- to 60-cent premium over upland cotton, notes Michael Swanson, agricultural economist with Wells Fargo, in Minneapolis. He expects growers to plant as many as 700,000 acres of cotton in California compared with 306,000 in 2010.
 
“In California, they like planting cotton because it’s an easy crop,” Swanson notes. Cotton will likely displace tomatoes and some alfalfa fields. For growers with three-, four-, and five-year alfalfa stands, the decision will be easy, Swanson adds, particularly if payments from area dairies have been late.
 
NCC’s survey shows growers intend to plant 18.9% more acres to cotton in the Mid-South with Mississippi acreage up 24.8% and Tennessee’s up 39.5%. Depressed cotton prices over the past three to four years spurred some growers, particularly in the Mississippi Delta, to sell their pickers and other cotton farming equipment and switch their operations to corn and soybeans.
 
With prices of cotton as high as they are, Swanson and others expect some of those growers to reinvest in new state-of-the-art cotton harvesting equipment.
 
John Deere’s new 7760 cotton picker can harvest seed cotton, form it into round bales, wrap it in a protective plastic cover and drop it in the field.  “One of these machines will replace two boll buggies, two pickers and two module feeders,” says Peter Schlee, cottonseed merchandizer with APEX, Orchard Park, N.Y. The 7760 also cuts labor costs because one or two people can handle it rather that the six or eight it would take to run the standard equipment, Schlee says.
 
Cotton acres in Kansas, Oklahoma, and Texas are expected to increase 11.9%, with the largest percentage increase coming from Kansas, up 35.6%, but the largest number of additional acres coming from Texas, up 640,000.
 
Cotton acres in the Southeast are expected to increase by 12.8%, with most of the additional acreage coming at the expense of peanuts and soybeans but also corn. “The Southeast’s sandy and loamy soil is good for cotton growing,” says Schlee. “In some areas of the Southeast, where corn yields can run 120 to 150 bushels per acre and you can pick two bales of cotton on that ground, planting cotton is a no brainer.”
 
Schlee thinks the current NCC estimates will prove low and that U.S. cotton acres this spring could increase by 16 to 20%.
 
“Three years ago, cotton prices of 94 cents would have made cotton producers jump for joy,” says Swanson. Could cotton be headed to $2.25? No one really knows, he says. Two to three years from now, when the large price swings have leveled out, Swanson thinks cotton will settle into a price range and the outlying price possibilities can be eliminated.
 
In world news, India is on track to harvest a record 33.9 million bales of cotton, according to India’s Agriculture Minister Sharad Pawar.

 

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