Cutting Cotton: Acres Projected to Plummet in 2013

February 12, 2013 05:49 PM
Cutting Cotton: Acres Projected to Plummet in 2013

The National Cotton Council’s annual planting intentions report is the first definitive look at acreage for the upcoming year. While cotton prices rallied recently, more competitive crops, like corn and soybeans, may win out this year. And this could create a 30-year low in cotton production.

Rumblings over a drop in 2013 cotton acreage started last fall.

"When you put in $600 to $650 expense for cotton, and you’re only getting out $500 because of low cotton prices, at $.66 per pound, it doesn’t work," Plainview, Texas farmer Chance McMillan told AgDay in November.

Based on a survey the National Cotton Council conducts each year with its growers, Texas’ planted cotton acres will drop 25% this year, which is in line with the national estimate.

The survey shows overall cotton acres will be down nearly 27%, falling to just over 9 million planted acres.

The region where cotton looks to take the biggest hit is the Mid-South, where Arkansas growers say they plan to reduce their cotton acreage by more than 60%. Mississippi isn’t farm behind, down just under 60%. And acres in Tennessee are projected to be cut in almost half.

"The Mid-South has a lot of alternative crops and a lot of ability to switch between cotton, corn and soybean," says Gary Adams, National Cotton Council economist.

The survey also showed corn to be the most alternative crop choice this year, followed by soybeans.

"When we compare where the cotton market is today, as growers start to make those planting decisions, as we look at the cotton market relative to corn and soybeans, compared to where we were last year, cotton is not as competitive," Adams says.

Adams says in areas like Texas and the Southwest, cotton remains a viable option for many farmers.

"Cotton is more drought-tolerant," Adams explains. "Particularly if you’re in a dryland area, cotton is more drought-tolerant than alternatives we may see in other parts of the region."

Adams says many cotton gins and warehouses were able to weather the storm in 2009, when cotton acres saw a significant drop. Some, however, closed and never reopened. Much of Texas’ infrastructure seemed immune. This year could be a different story.

"We may have to tighten our belt," says ginner Larry Nelson, CEO of WinStar, Inc. "We have confidence it will return, as opposed to some of my Mid-South friends. They’re losing their infrastructure. At this point, we don’t expect that, but if things don’t change, we will."

Adams says just because planted acres will be down, this doesn’t necessarily reflect a decrease in overall production.

"It will depend on weather, particularly what happens with weather in Texas," Adams says.

"On the short-term, the weather is not especially optimistic or pessimistic," says John Nielsen-Gammon, Texas State climatologist. "Conditions are near normal in the Pacific. So, we don’t have the big El Niño-La Niña driver."

Weather isn’t the only challenge—so is increased competition from outside markets and man-made fibers. Adams says the bottom-line is the cotton industry has to continue to grow demand.


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