A Big Day for Acreage, and Cotton Prices Too
March 30, 2010 I don’t know if I’ve mentioned it here before, but this past fall the company sent me over to Liverpool, England, for the annual ICA Dinner.
I cabbed across the city. Wore my tuxedo. Rubbed elbows with some highly successful international businessmen. Confidently ordered some expensive wine, and then politely got told that I had butchered the pronunciation. (Key-ahn-tee.) Still, it was a high time for a dirt farmer from the Mississippi Delta.
Sometime during that week I toured the offices of Plexus Cotton Ltd., a global cotton trading company that has activities in nearly every sector of cotton’s supply chain. There, I met with a gentleman named Peter Salcedo, who I was prepared to enlighten with my vast knowledge of plant bugs, pigweed and hoe-wielding.
Mr. Salcedo, it turns out, was a bit of a cotton savant. By the time I left his office he had strung together the effect of the small amount of acreage in West Africa on spinners in Asia and on growers in South America. Put simply, he could’ve written that month’s edition of Cotton International magazine from cover to cover without any input from me.
I say all this only to draw your attention to an acreage projection Plexus made last week. In a memo, the company mentioned that U.S. cotton acreage could touch 11 million acres this year, citing rising prices as a primary factor. That number was the most optimistic we have seen, by a long shot.
Plexus’s projection is in keeping with a more bullish trend for U.S. cotton, though. Projection totals have steadily increased since Cotton Grower’s acreage survey predicted 9.9 million acres in January. A month later, the National Cotton Council’s number was 10.1 million acres. Then in March, both Allenberg Cotton and the USDA Annual Agriculture Outlook Forum produced projections of 10.5 million cotton acres in the U.S. for 2010.
As you may know, tomorrow marks another big day for acreage projections. USDA will release their final official estimate for the coming season. This number will matter because it is likely to be a much more accurate picture of what the nation as a whole will plant in the coming months. And as you’ve heard Allenberg CEO Joe Nicosia say, that number could be a major factor in the difference between .75 cent cotton and $1 cotton.
So we’ll be waiting anxiously for the USDA release tomorrow. We’ll be sending you a special edition of the eNewsletter as soon as the projection is released. And you can always check in on the projections by visiting www.cotton247.com/acreage.
A rising tide floats all boats, and Cotton Grower is certainly among the ginners, seed company representatives, equipment manufacturers and cotton-specific chemical companies who would like to see as much cotton in the U.S. as possible. Here’s hoping that more prosperous days lie ahead for all of us in the cotton industry, from Leland, MS, to Lubbock, TX, to Liverpool.
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