Acreage Survey Shows Cotton Gains Across the Belt
March 3, 2011 As expected, cotton acreage will continue to rebound in the 2011 season. According to the annual Cotton Grower survey of growers, 12,475,250 acres of cotton will be planted this spring — 12,205,250 of Upland, and 270,000 of American Pima.
The survey also included questions ranging from seed decisions to potential equipment purchases.
If the acreage figure is correct, it would be an increase of 16% over 2010, and 27% over 2009. It would also be the highest acreage since 2006 when 15 million acres of cotton was planted. Upland acreage will increase by 13%, and Pima by 23%.
The Southwest will continue to have more than half of the nation’s acreage — 51.63%. Texas is projected to show an increase of 300,000 acres over 2009 to 6 million. Georgia will remain in second place, increasing by about 153,000 acres to 1.4 million over 2010. Depending on the weather at planting, and with more consistent control of resistant Palmer amaranth, it would not be shocking to see Georgia’s acreage hit 1.5 million — the highest since 2000.
After falling to historic lows in 2009, Louisiana’s acreage will rebound from 230,000 acres to 325,000, up 30%. California will increase by 28%, Tennessee by 20%, followed by North Carolina and Mississippi at 19%.
The First
Each year, Cotton Grower’s survey is the first of the new season and is taken in October and November, then announced in this issue to coincide with the Beltwide Cotton Conferences. For 2010, the Cotton Grower survey projected that 9.9 million acres of cotton would be planted, but that turned out to be 1 million acres below USDA’s final figure of 10.9. One reason could be that during the time the survey was taken, Mid-South and South Georgia growers were battling disastrous harvest conditions, and were in no mood to spend time thinking about what might happen in 2010 when they couldn’t get 2009’s crop out of the field. Some cotton in Georgia was still being picked on Valentine’s day.
The National Cotton Council’s planting intentions report follows and is released each year at its Annual Meeting in February. USDA’s planting intentions report comes in March, with the final acreage reported in June.
Price is the Driver
Obviously, prices are driving the acreage increase. Cotton for delivery in December of 2011 on the New York Board of Trade has been as high as $1 per pound, and most economists believe that the December 2011 contract will continue to have bullish fundamentals. For example, the October USDA supply and demand report showed that U.S. inventories will be running on fumes at 2.2 million bales by the end of the current marketing year that concludes on July 31. That’s down from a 10 million-bale carryover in the 2008/09 marketing year. And world ending stocks will be 15 million bales less than in the previous marketing year.
As always, China’s consumption, India’s production, and prices for competing crops in the U.S. are the wild cards:
Demand for cotton in China outstripped domestic production by 16.5 million bales in 2009/10, according to the China Cotton Association and Bloomberg News. China’s domestic cotton production fell by 14.7%, while yarn production grew by 16.6%.
Dr. Seshadri Ramkumar of Texas Tech University reported in late November that unseasonably heavy rains in the cotton-growing regions of India have created some uncertainty surrounding the country’s harvest and timely delivery. Still, India will produce more than it consumes for the second straight year, making it a tough direct competitor to the U.S. for China’s business.
Soybeans for 2011 delivery on the Chicago Board of Trade (CBOT) peaked at $12.73 per bushel in early November, then dropped to $11.73 in early December. Over the same period, corn for December 2011 delivery on the CBOT peaked at $5.65, before falling to $5.25.
The question for prices in 2011 — and one of the major final determinates of U.S. acreage — is whether cotton has closed the profit gap between grains or remains higher than other competing crops.
To see a state-by-state breakdown of acreage projections, as well as official projections from the National Cotton Council and the USDA, visit www.cotton247.com/acreage.
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