Is Our Survey Low Again?
January 20, 2010 Just prior to our 2009 Annual Cotton Grower Acreage Survey, I was having a chat with someone who’s been around cotton longer than I’ve been alive. He said he’d be happy with an acreage number that started with an 8. That is, he knew it was not going to start with a 9, so he was hoping it wouldn’t start with a 7.
But growers told us that there would be only 7.91 million acres of Upland cotton planted in 2009. He can blame me for his disappointment. It was my fault the figure was not a little higher than that because on the survey forms, I forgot to ask growers about Pima acres. In February, the National Cotton Council’s acreage survey was released at its Annual Meeting in Washington and called for 7.965 of Upland and 142,000 of Pima. The total was 8.11 million acres. Since our Upland projections were off by less than 1%, I’m guessing we’d have been pretty close on Pima, too. My apologies to my friend for the distress.
I’m happy to report that both Cotton Grower and the National Cotton Council were both low by nearly a million acres in their 2009 projections. The final USDA acreage report showed that slightly over 9 million acres were planted in 2009, and I’m not so sure our 2010 survey is not low again at 9.912 million acres. See: www.cotton247.com/acreage/ for a state-by-state breakdown. Remember there was a lot of cotton left to be picked in October and November when our survey was being taken. It’s hard to think about this year’s crop when last year’s crop was still in the field and pickers were sitting under the shed.
But there are signs that the state of cotton is starting to improve. The market has been doing its job. It always does. An over supply of cotton is being reduced by lower production from lower acreage.
If the economy is beginning to improve, then consumer demand for cotton will increase and we’ll need more acreage to meet it. But let me temper that. Credibility demands that I do it. Though the economy may really and truly be turning and heading north, I believe consumers are going to be extremely cautious before spending follows. It may take longer than we hope for consumer spending to pick up.
Dr. O. A. Cleveland, who needs no introduction here, said when the grains markets began to skyrocket, “Tell me what the price of November soybeans is on March 15, and I’ll tell you how many acres of cotton we’ll have.” The difference between then and now is that cotton has been to 40 cents per pound but was over 77 cents for December delivery when we went to press in mid-December of ’09. Soybeans were holding steady at around $10.00 per bushel for November then, too. Corn was at around $4.50 for December.
So, my first wish for 2010 is that we’re reaching the point where cotton is competitive enough to be back in the crop mix. My second wish for 2010 is that our acreage survey is a million acres too low again.
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