Two straight years of rainy harvests are sure to push cotton acreage lower in 2003. But sickly cotton prices versus stronger grain prices is an even bigger reason.

“I've been going down in cotton acreage over the years, and next year I'll probably be at 40 percent of what I typically grow if prices remain where they are,” said Jay Hardwick, who farms 7,300 acres on Somerset Plantation in Newellton, La. “I grow a lot of corn, milo and wheat already. I'm trying to get to a fourth of my acreage for each crop.”

For Hardwick to change his mind about cotton will take a market price considerably higher than today's.

Hardwick noted that the countercyclical payment for cotton under the new farm bill “can be very elusive, and you have to figure out how to capture it. If you want to plant 1,000 acres of cotton, and you have a base of 400 acres, the bankers will assume you'll cash flow on a 73-cent target price if you know what your strategy is for capturing the countercyclical.

“But really, your other 600 acres are only going to bring 52 cents. What I'd rather see is the market move slowly up to 62 to 63 cents net or better.”

Selling cotton is also a worry for Hardwick. The producer had no problem selling his lower-quality 2001 crop cotton last year. “My best-quality cotton had great staple and low micronaire, but I couldn't get rid of it until June.”

If cotton prices were to turn around “I'd be quick to jump back in because I have an investment in equipment that I have to maintain,” Hardwick says. “I'm also partners in a gin with Panola Co. And you can't just hibernate that enterprise. You have to feed it.”

Hardwick notes, “There are some real strategic changes happening on Somerset — like preparing the family for income from grains rather than cotton. That's a challenge.”

While Hardwick has achieved excellent corn yields on combined dryland and irrigated land the last few years — 200 bushels in 2001 and 165 bushels in 2002 on 1,700 acres — he hasn't been able to keep his production costs down.

“On July 31, 2002, I was $350 into a cotton crop and $301 into a corn crop. My fertilizer in corn is $70, seed is $39 — but it's elite stuff, insecticides was $22, and herbicide was $40-something. With those costs, you have to make tremendous yields to make it work.”

This is one reason why wheat and milo will be a larger share of Hardwick's crop mix.

“To me, milo is the sleeper. I've been working with it for three years. Milo is costing me a third of what it costs to produce a corn crop,” said Hardwick.

The producer's milo yields in 2001 were 125 bushels, dryland, before August rains and 118 bushels after the rains. “This year, my milo yields are 115 bushels. This year, my milo will make more net return than my corn. So next year, I plan to plant 2,000 acres of it.”

Hardwick stresses that he's not disappointed in cotton yields. In fact, he's been very happy with the yield potential of several new varieties.

In mid-September 2002, Hardwick was looking at another excellent cotton crop, including one field of Stoneville ST 5599 BG/RR, which he planted behind corn. “I'm glad to see LA 887 (a parent) in this line. I always thought it was an excellent line. But you do have to slow this variety down. It's had 24 ounces of Pix.”

Hardwick has also seen insect control costs drop significantly with new transgenic cotton varieties. “I have some more saving to do with herbicide costs. I'm spending a little over $55 an acre.”

Hardwick is also giving wheat a chance to make some money for the farm. The crop can't be considered as just a cover crop after the recent upturn in prices. In fact, Hardwick's wheat cover on one field going in cotton looked so good this spring that he harvested it and followed it with milo. “That system looks like it could build up a lot of organic matter very quickly. The trick is to get a good vigorous wheat plant in the fall.”

Batesville, Miss., farmers John and Lent Thomas are considering the same option. “We're not necessarily going to have wheat for harvest next year,” John said. “We have a lot of sandy ground that we planted wheat on last year for a cover crop. This fall, we're going to plant wheat, and if cotton prices are up next spring and wheat's down, we'll burn it down and plant cotton.

“If wheat's up, then we'll harvest the wheat and plant soybeans on irrigated ground and leave the dryland fields out.”

The producers, who farmed 8,000 acres of cotton this year, will reduce cotton significantly in 2003 if prices remain where they are, John said. “We're going to have some cotton, but not like what we have now.”

Like Hardwick, the producers are not disappointed in cotton yield potential — one field of ST 4892BR looked very promising during a recent interview with the growers. It's just that the market hasn't been very accommodating.

“We want to plant something that people want — wheat and corn,” said Lent, who hopes to put the farm's six, six-row cotton pickers to work custom harvesting in Louisiana and Texas, and perhaps swap out the pickers for some combine work. “We're hoping to forward contract some wheat and corn.”


e-mail: erobinson@primediabusiness.com.