Though nobody’s expecting Mid-South cotton acres this year to show a sharp rebound, as planting time moves nearer there is talk that earlier gloomy forecasts may be tempered somewhat as producers put a pencil to the economics of cotton versus grains.
“There are fewer acres of wheat in the Mid-South this winter,” Gary Adams, vice president of economic policy analysis for the National Cotton Council, said at the annual meeting of the Southern Cotton Ginners Association at Memphis.
“Those acres will go to something — the question is what. Farmers are still weighing their decisions. From where we are now, with corn and soybean contract prices off 14 percent to 17 percent, cotton has gained ground with relation to those crops. This has potential to affect plantings in the Mid-South.”
For the remainder of 2009, Adams said, oil prices are expected to remain at fairly low levels, with some moderation expected in fertilizer and diesel costs.
“Growers may be looking at $50 to $100 per acre lower costs than in 2008.”
Larry McClendon, Marianna, Ark., producer/ginner and 2008 chairman of the National Cotton Council, speaking at the same meeting, said, “I think we may see somewhat more cotton this year than has been forecast earlier. In my area of Arkansas, I believe we’ll have more than last year.”
Despite the “negative mindset toward cotton” the past two or three years, with “everyone wanting to plant grains,” he said “there are some good things about cotton”:
• Yields have been steadily increasing. “Over the past 10 years in Arkansas yields are up well over 200 pounds per acre, with a per acre average over 1,000 pounds for the past five years. Much of that has been the result of advances in seed technology. A lot has been said in recent years about the need for improved cotton quality, but the answer to profitability for the U.S. grower is through greater yield.”
• Input costs are down versus a year ago, “which means cotton will be cheaper to produce this year.”
• Revenue for cottonseed has reached all-time high levels, “unlike anything I’ve seen in my lifetime. There’s good money in cottonseed today, even though the volume is down.”
• Worldwide, cotton plantings by some of the U.S.’ major competitors is declining, “which can bolster demand for our cotton.
“If you sit down and do the math for soybeans versus cotton, cotton looks pretty good,” McClendon said.
“I want to be in the farming business long term, and I made a decision not to go all grains. I didn’t want to put myself in a position where I couldn’t get back into cotton.
“All of us have forgotten more about growing cotton than we’ll ever know about growing grains. I’m going to do what makes economic sense for my farm and its long term viability.
“We need to give cotton a second look,” McClendon said. “We may see that the numbers are in our favor.”