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Market Prices Impacting Early 2016 Crop Decisions

By Rod Santa Ana

As Rio Grande Valley farmers prepare to plant seeds in the coming weeks for this year’s row crops, many are scratching their heads over what to plant, according to Brad Cowan, the Texas A&M AgriLife Extension Service agent for Hidalgo County.

“Commodity prices are not good,” he said. “That poses a huge challenge; growers don’t know what to plant. Right now they’re hoping something will happen to bump up the price on a crop before planting.”

Commodity prices are low worldwide, thanks to a “perfect storm” in the global economy, according to Luis Ribera, an AgriLife Extension agricultural economist in College Station.

“There’s a worldwide economic slowdown,” he said. “China is not importing as much commodities as they used to. Overall, we had a good production year last year, so commodity stockpiles are high. That’s created a perfect storm for a drop in commodity prices across the board.”

But farmers farm, and something’s got to go in the ground, Cowan said.

“Valley growers have to plant something. They try hard to plant the crop that fits their operation and returns the most profit,” he said

For some, that will likely be cotton.

“We’re hearing that there will be more cotton this year than the 65,000 acres planted in the Valley last year,” he said. “One reason is cotton growers can try to compensate for low prices by increasing their yields.”

Cowan said with improved cotton varieties and the success of boll weevil eradication efforts, higher yields are indeed possible.

“We’ve been having good cotton yields lately, the last two years,” he said. “Some growers have managed to produce four bales per acre. With each bale weighing about 500 pounds, some have been meeting that 1-ton cotton goal that before the decline in boll weevils was just a dream here.”

Harvesting three to 3.5 bales per acre for irrigated cotton is no longer rare, Cowan said.

“To produce four bales per acre, a lot of things have to fall in place just right,” he said. “But without having to worry about boll weevils, getting three bales per acre is becoming more common. There are more bolls of cotton on the plant at harvest when boll weevils aren’t around to knock them off.”

On the plus side, rains that fell throughout the fall are going to help, no matter which crop is planted.

“Many growers have good soil moisture to work with this year,” Cowan said. “That helps get a crop off to a good start, because some years the soil is so dry that it’s a real challenge to grow a healthy crop.”

A wet year may mean growers will plant more corn, he said.

“Corn acreage here may see an increase because some dryland growers who don’t have the ability to irrigate will plant corn,” Cowan said. “We don’t usually recommend growing corn on dryland acres, but in a wet year some growers will roll the dice on that one.”

One crop that has been steadily increasing in acreage in the Valley over the years will likely not be a candidate for growers this year.

“Nobody is offering sunflower contracts. Last year we planted about 30,000 acres, a lot of it in the McCook area, but this year there seems to be an oversupply of it. Those companies that usually buy sunflowers are just not buying, but hopefully that market will come back soon.”

Sesame also seems to be stored in large enough quantities that acreage here will also shrink. But some soybeans will be planted, Cowan said.

“Prices are down for soybeans from last year, as well as other feed grains,” he said. “But growers should consider planting soybeans because it’s a good rotation crop that helps replenish the soil.”

Grain sorghum, one of the area’s largest crops, is also a tricky proposition.

“The wild card there is the sugarcane aphid, which can drastically reduce yields,” Cowan said. “In 2014, growers here had to spray a lot of insecticides to manage populations, but not in 2015 because insect populations were low. By contrast, North Texas growers had to spray heavily in 2015.”

As a result of not knowing what insect pressures 2016 will bring, growers are considering dropping grain sorghum this year, he said.

It’s not a rosy picture, but Cowan said there is always hope.

“Something could happen to improve prices before these row crops go to market. You never know; it could very well happen.”

 

Rod Santa Ana is a writer with Texas A&M AgriLife Extension

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