What is in this article?:
- Cotton oversupply is a global issue, not just a problem in the U.S.
- New peanut varieties are among many technological advances that will help growers long-term, but may mean more peanuts per acre for 2013.
- Continued good prices for grain crops have ramped up pressure on peanuts and cotton to compete for acreage.
Combined with big acreage cuts in 2012, some cotton producing areas of the state will likely have a 50 to 60 percent cut in acreage over the two-year period.
In Georgia, the largest of the Lower Southeast cotton-producing states, acreage is expected to tumble by another 20 percent or so, according to University of Georgia economists.
High yields, and in some areas record high yields, did little to impact cotton carryover, despite significant acreage reductions in 2012.
Worldwide, the news isn’t much brighter, though there remains a good demand for cotton, which will help keep prices somewhat stable, despite an over-supply of worldwide.
Darren Hudson, director of Texas Tech’s Cotton Economics Research Institute, says demand for cotton is expected to increase by about 1.9 percent per year for the next 10 years. Over that period of time textile mill use of cotton is expected to increase by about 31 million bales.
The big challenge is going to be what to do with all that cotton. For the first time in nearly 10 years stocks were higher than use in 2012. And, world cotton stocks are expected to jump another 11 million bales in 2013.
China is the biggest player in the cotton export market and the news is not good there. It’s apparent China does not intend to be caught short on cotton and be forced to pay $1 per pound, much less the $2 per pound they paid just a few years back.
China is expected to have a carryover in 2012 of about 30 million bales. This surplus is expected to increase by another 8 million bales in 2013.
Worldwide, the surplus is 69 million bales, expected to increase to 80 million bales in 2013.
Longer-term the outlook is a bit brighter, according to recent reports from the International Cotton Advisory Committee.
After three consecutive years of increase, global stocks could contract by 6 percent from the record level of 16.6 million tons (76.24 million bales) forecast in July 2013, to 15.6 million tons (71.65 million bales) in July 2014.
Most of this reduction in stocks is expected to take place outside of China, the report projects.
The pricing instability of King Cotton couldn’t have come at aworse time for Southeastern growers.
After years of struggling to over-come weed resistance, especially glyphosate-resistant Palmer amaranth, growers across the region seem to be catching up with weed problems and are rotating herbicide families and crops to minimize losses.