USDA: Early Projections Show 12.5 Million U.S. Cotton Acres in 2020
March 2, 2020 USDA’s early projection for 2020 U.S. cotton planted acreage is 12.5 million acres – 9% below 2019 and the smallest area since 2016.
Those projections were shared during the USDA Agricultural Outlook Forum on February 20-21.
In their Cotton Outlook report, the agency noted that expected harvest prices for cotton relative to corn and soybeans has played a key role in the cotton area planted. Cotton futures prices from mid-January through mid-February 2020 averaged 4 cents (nearly 5.5%) below price expectations in early 2019. In that same period, price declines for corn and soybeans were smaller, indicating that alternative crops are relatively more competitive this year.
Another contributing factors to uncertainty regarding acreage decisions for 2020 include production issues and results during 2019, the effects of the Phase One trade agreement with China and the impact of the coronavirus on cotton demand.
In the USDA analysis, cotton plantings of 12.5 million acres are estimated to result in harvested acreage of about 11.0 million acres – 7% below 2019. The projected abandonment rate of approximately 12.5% is based on regional long-run averages, with the exception of the Southwest where 2020 abandonment is projected at 19% (down from 23% in 2019). USDA analysts point out that Southwest abandonment rates are highly variable and conditions in the region will have a considerable impact on the U.S. crop. The latest NOAA seasonal outlook for the Southwest indicates that drought is not forecast to be an issue through at least the end of April.
Based on regional average yields, USDA is forecasting a national average yield of 855 pounds per harvested acre – up from 817 pounds in 2019 – resulting in a projected crop of 19.5 million bales (3% below 2019 production). The anticipated rebound in U.S. cotton yield is expected to offset much of the acreage reduction in 2020.
Smaller crops are expected for most of the Cotton Belt in 2020, with the exception of the Southwest where cotton production could rise to its second highest on record.
In January, Cotton Grower’s acreage survey showed 12.1 million acres for 2020. In mid-February, the National Cotton Council survey projected 13.0 million acres.
The final look at projected acreage for 2020 comes with USDA’s Prospective Plantings report on March 31, based on a survey of producer planting intentions to be conducted in early March.
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