Relative Prices Driving Acreage Decisions

Each year, the National Cotton Council surveys producers as to their acreage intentions for the coming year. The survey, mailed in mid-December to approximately 10,000 producers, asks growers to give their acreage for cotton and competing crops in 2008 and their intended acreage for 2009. The survey results, which were collected through mid-January, indicate that U.S. cotton producers intend to plant 8.11 million acres of cotton this spring, down 14% from 2008. Total cotton area is comprised of Upland at 7.97 million acres and ELS at 142,000.

The survey suggests that all regions intend to reduce Upland cotton planting area from last season. The West and Mid-South show the largest percentage drops of 31% and 23%, respectively. Smaller reductions of 18% and 9% are expected in the Southeast and Southwest.

Across the Southeast, Florida was the only state to indicate an increase in cotton, which appears to be coming at the expense of peanuts. Alabama reported the largest percentage reduction at 33%, followed by Virginia at 23% and Georgia at 17%. These three states’ responses showed shifts to corn and soybeans. South Carolina and North Carolina plan cutbacks of 18% and 12%, respectively, as growers shift to soybeans.

Results for the Mid-South states show declines in the 25% range, except for Tennessee’s ― down 4%. The majority of growers’ intentions are to shift acres to soybeans.

Texas growers expressed reducing area by 9% to 4.5 million acres. The other regions’ reductions of relatively more acreage imply Texas’ share of the total upland area is expanding, now at 57%, up from 54%. Only modest adjustments were shown for Kansas (up 7%) and Oklahoma (down 2%).

The Western region showed a 31% reduction. California Upland planted area intentions represented 55% losses, stemming from concerns over water availability, and some producers’ opting to grow specialty crops. Survey respondents also revealed declines in Arizona (down 7%) and New Mexico (down 40%) upland area.

Adjustments in the four states producing ELS cotton indicated mixed reviews with declines in California and New Mexico, partially offset by gains in Arizona and Texas.

Assuming average abandonment and state-level trend yields, a 12.76 million bale crop is expected, compared to 2008’s total production of 13.04 million bales.

Inputs, Weather

It is important to remember that the survey captures the intentions at the time the responses are collected. Those intentions can change between now and planting time as market conditions change. In addition to relative crop prices, growers will take into account changes in fuel and fertilizer costs, which are expected to be $50 to $100 per acre lower this year than last. Also, weather and agronomic considerations will factor into growers’ decisions.

Since the survey was conducted, the competitive landscape has changed, primarily due to weaker corn and soybean prices. USDA’s latest grain estimates, showing an increase in stock levels, highlights the pressures on demand. Currently, the ratio of crude oil at $45 per barrel to corn at $4 per bushel does not foretell profitable ethanol production. Soybean prices are also closely watching weather developments in South America. If recent rains allow their crop prospects to improve, soybean prices could remain under pressure. Movements in cotton prices relative to corn and soybeans have the greatest potential to affect acreage in the Southeast and Mid-South.

In the early months of 2009, the U.S. cotton industry is facing a host of economic challenges. The intricate linkages between the cotton market, other commodity markets and the general economy have never been more evident. Volatility has become the rule rather than the exception. While the NCC’s annual survey has proven to be an excellent barometer of the growers’ mindset, we must remember that acreage decisions will continue to be a moving target in the current environment.

Leave a Reply

Planting Stories
Planting

Managing Cotton after Uneven Emergence

June 13, 2016

Mississippi State University specialists offer guidelines for managing cotton fields with uneven plant maturity.

Planting

USDA Projects 9.56 Million Cotton Acres in 2016

March 31, 2016

USDA’s March 31 Prospective Plantings report projects that U.S. cotton growers will plant 9.56 million acres in 2016 – an 11% increase over last year.

Planting

March Rainfall Could Mean More Cotton Acreage

March 29, 2016

More acres may be shifting back to cotton in 2016. For producers who may be planting cotton for the first time in several years, variety selection can be a formidable challenge.

Planting

Preplant Burndown Time in NC

March 8, 2016

Mid-March through early April is the ideal time for preplant burndown applications in North Carolina cotton fields.

Planting

Reference Guides Online for Proper Variety Placement

March 2, 2016

Charts to help provide guidance to growers on properly placing and managing cotton varieties are now available online from Mississippi State University.

Planting

Clemson: Focus on Insect Management, Proper Variety Selection

February 4, 2016

Clemson Extension specialists point to insect management and proper variety selection as keys to help SC cotton producers grow more profitable crops in 2016.

Planting

SC Cotton Growers Look to Rebound from 2015 Flood

January 28, 2016

After South Carolina’s cotton crop was essentially flooded out in 2015, what’s in store for the state’s growers this year?

Around The Gin
Product News

Cotton Board Releases 2015 Annual Report

September 27, 2016

The Cotton Board’s 2015 Annual Report is now available online.

Product News

It’s a Deal: Bayer to Acquire Monsanto

September 14, 2016

Bayer and Monsanto have announced an agreement under which Bayer will acquire Monsanto for approximately $66 billion in an all-cash transaction.

Product News

How Fiber Quality Became So Valuable

September 14, 2016

Textile expert Dean Etheridge explains the meteoric rise of fiber quality on the global market.

Product News

Cotton Cultivated Website Adds Custom Weather Feature

September 1, 2016

Cotton Cultivated – Cotton Incorporated's producer information website – now features a new weather tool tailored for cotton growers.

Product News

ChemChina/Syngenta Deal Gets U.S. Foreign Investment Approval

August 22, 2016

ChemChina and Syngenta have received a key clearance for the proposed consolidation of the companies.

Product News

Enlist Cotton Trait Earns Full Export Approval

August 10, 2016

Cotton varieties containing Dow AgroSciences’ Enlist trait now have full export approval in key countries.

Product News

Spray Equipment Offer Helps Maximize On-Target Applications

August 3, 2016

A new spray technology equipment offer can help growers participating in Roundup Ready PLUS Crop Management Solutions upgrade their sprayers to maximize on-target applications.

Product News

EPA Allows Sale and Use of Existing Belt Inventory

August 2, 2016

The U.S. EPA’s Environmental Appeals Board has upheld an earlier decision to cancel registration for Bayer's insecticide Belt, but is allowing sales of existing stocks to growers for use.

Latest News
Planting

Managing Cotton after Uneven Emergence

June 13, 2016

Mississippi State University specialists offer guidelines for managing cotton fields with uneven plant maturity.

Planting

Guidelines for Replanting Decisions

May 24, 2016

There are no definitive guidelines for making replant decisions. But a list of factors to consider may help make those decisions a bit easier.

Planting

Improved Soil Moisture for Most Texas Cotton Fields

May 4, 2016

Improved soil moisture in most cotton fields in Texas are pushing growth and maturity in early-planted acres and are setting up the state’s northern acres for good planting conditions.

Planting

USDA Projects 9.56 Million Cotton Acres in 2016

March 31, 2016

USDA’s March 31 Prospective Plantings report projects that U.S. cotton growers will plant 9.56 million acres in 2016 – an 11% increase over last year.

Planting

March Rainfall Could Mean More Cotton Acreage

March 29, 2016

More acres may be shifting back to cotton in 2016. For producers who may be planting cotton for the first time in several years, variety selection can be a formidable challenge.

Planting

Preplant Burndown Time in NC

March 8, 2016

Mid-March through early April is the ideal time for preplant burndown applications in North Carolina cotton fields.

Planting

Reference Guides Online for Proper Variety Placement

March 2, 2016

Charts to help provide guidance to growers on properly placing and managing cotton varieties are now available online from Mississippi State University.

Planting

Clemson: Focus on Insect Management, Proper Variety Selection

February 4, 2016

Clemson Extension specialists point to insect management and proper variety selection as keys to help SC cotton producers grow more profitable crops in 2016.

Planting

SC Cotton Growers Look to Rebound from 2015 Flood

January 28, 2016

After South Carolina’s cotton crop was essentially flooded out in 2015, what’s in store for the state’s growers this year?

Planting

Market Prices Impacting Early 2016 Crop Decisions

January 19, 2016

As farmers in the Rio Grande Valley try to finalize cropping decisions before planting begins in the coming weeks, many are still struggling with what to plant. For some, that will likely be cotton.

Planting

Mississippi Variety Trial Data and Planning Budgets Now Available

December 4, 2015

Mississippi State University Extension’s 2015 On-Farm Cotton Variety Trials publication and Cotton 2016 Planning Budgets guide are both now available online.

Planting

NC State: PGR Management Considerations

June 17, 2015

Side-dressing could help spur vigorous cotton growth, especially with timely rain. According to the NC State Extension cotton team, it’s time to start PGR management plans.

Planting

El Nino Weather Good for High Plains Cotton

May 12, 2015

The Texas High Plains are benefitting from the current El Nino weather pattern. And that’s good news for this year’s cotton crop.

Disease Control / Nematodes

New Cotton Webcasts Focus on Seedling Diseases and Soil Fertility

April 29, 2015

Two new webcasts focusing on seedling diseases and soil fertility have been added to the Focus on Cotton online webcast resource.

Planting

Don’t Let Early Season Thrips and Weed Management Impact Seedling Vigor

April 17, 2015

Increased challenges in early season thrips and weed management can potentially impact the value of vigorous cotton seedling growth.