Cotton appears poised to buy back at least some of the acres the crop lost over the past three years.

Whether it does depends on what happens with corn, soybean and peanut markets before planting time. Right now, cotton futures in the mid-70 cent per pound range look intriguing to many farmers.

“Current prices are looking good, and I hear they may possibly ease up there higher,” says Lamar Black, who farms at Millen, Ga.

Black figures he will plant at least as much cotton in 2010 as last year.

“Cotton looks positive right now. We were actually up 100 acres in 2009, and I’m not going to decrease any this year. If we increase cotton, it will come out of soybean acres. Soybean and corn prices look like they’ll be at a profitable level, too, and I’m still going to plant corn. We still don’t know what the peanut contracts will be like. If input prices stay where they are, we’ll be in okay shape,” Black says.

The cotton industry, concerned about stability of its infrastructure after three years of losing acreage to soybeans and corn, would welcome a boost. In 2009, the U.S. cotton crop settled at slightly more than 9 million acres. Compare that to 2006, when 15.3 million acres were planted.

“Cotton prices have improved relative to some other crops, so the expectation is a plus for the potential for cotton area to be higher,” says Leslie Meyer, USDA-Economic Research Service economist.

“On paper, it looks like the increase for 2010 likely may be across the Cotton Belt. In the Southeast, some rotation things may keep cotton from increasing a whole lot. In Texas, there are some water issues that could cause problems, but they are having good experiences with varieties that are doing well for that area. The Mid-South had a terrible year in 2009, but the alternative crop situation there looks better for cotton now,” Meyer says.

How high can cotton acres go? Officially, at least, no one hazards a guess right now.

“I certainly don’t see 15 million acres coming back. We don’t need that many acres any longer,” Meyer says.

Don Shurley, Georgia Extension cotton economist, expects at least a modest bump upward for cotton in his state.

“In Georgia and the Southeast, we’ll see an increase in cotton, for sure. I think soybeans are more attractive in the Mid-South,” Shurley says.

“Prices for everything are fairly attractive now. Cotton over 70 cents is going to bring some acres back. Soybeans and corn look good, as well. Peanuts supposedly are going to have a reasonably attractive pricing opportunity, too. For cotton, the question is how long will prices stay where they are, and what growers do in terms of price protection,” Shurley says.

The economists say much depends on the global economic recession winding down, which would push cotton consumption. “Expectation is for demand to rebound world-wide,” Meyer says.

That would be a relief after the crash of the past couple of years.

“As we went through the recession, retailers reduced the amount of textile products in the pipeline. If they feel the economy is coming back, they should replenish that pipeline. It could lead to a more robust recovery than we’ve been expecting. We sure hope the economy loosens up,” says Gary Adams, National Cotton Council economist.

Meyer and his USDA-ERS colleagues project world cotton stocks to be 51.8 million bales in July 2010 compared to 61.1 million bales the previous year. In 2008, stocks stood at 62.2 million bales, and in 2007, 63.1 million bales.

“The world stocks we’re anticipating will be the lowest they’ve been in a while. The last time they were this low was in the 2003-04 marketing year, when they were 48.2 million bales, and price was pretty good then. That is why we’re seeing prices jump the way they have. Combine that with the expectations for demand to pick up, too, and things look positive for cotton,” Meyer says.

U.S. cotton stocks also are declining.

“They’ll perhaps get down to 4.5 million bales by the end of the marketing year in July. In July 2008 they were about 10 million bales, so that’s a huge decrease. Mill use keeps inching upward, so we’re getting more optimistic about where mill use is headed,” Adams says.

All that is good news to Mike Tate, who farms at Hazel Green, Ala., but may not be enough to switch many acres to cotton.

“There are pretty strong positive indications for cotton. We could see an increase in acreage, especially is price gets over 80 cents per pound,” Tate says.

“In north Alabama, the price of soybeans will determine the outcome of the battle for acres with cotton. Everyone around here made a good soybean crop this year, so that’s going to be in their minds when planting time comes,” Tate says.

“Those who have shifted to grains here are pretty pleased with them and the success they’ve had growing them. I don’t hear as much about cotton here as strong as I do in the Southeast. It takes more work to grow cotton. There are opportunities for larger profits in cotton but we’re just teetering on edge of it with prices where they are right now. Price in the 70-cent to 75-cent range is not enough to get a lot of people here excited. It gets people thinking about it a little bit but it’s going to take 80 cents or above to get people excited about cotton,” Tate says.

Down the road in Courtland, Ala., Bobby Greene, president and CEO of Servico Gin, says at least some farmers in his area are talking about boosting both soybeans and cotton in 2010 while cutting back on corn acreage.

“They’re not nearly as excited about corn at the current price level. We’re just going to have to wait and see. There were so few acres of cotton here last year, if acreage doubled it still wouldn’t be huge. As a ginner, I’ll take whatever increase I can get. We’re looking at the prospect of a nice cotton increase,” Greene says.

“If cotton price does get higher, I hope it is based on fundamentals and not speculation. I do think growers would be well-advised to take some of this mid-70s cotton, if they’re going to grow it,” Greene says.

Gill Rogers, who farms at Hartsville, S.C., while pleased to see cotton competing for acreage, doesn’t anticipate a big increase on his fields.

“We haven’t gotten our acres mapped out yet. We had 500 acres of cotton in 2009 and probably will have 1,000 in 2010. That’s still only 20 percent of the cotton acreage we used to have. We used to be predominantly cotton with just enough corn for a good rotation. Now we’re growing cotton, corn, soybeans, wheat, peanuts and maybe grain sorghum. We’re diversified and we put equal emphasis on all the crops,” Rogers says.

“We have sold some 2010 cotton for 77 cents a pound. What we have to do is figure how to balance peanuts and cotton. They’re planted and harvested at about the same time. When peanut contracts come out, we’ll make the decision. We’re going to have to really focus on the bottom line,” Rogers says.

Southeastern cotton farmers have some additional decision-making to shoulder in 2010. It will be the phase-out year for DPL 555, the popular single-gene Bollgard variety that dominated Georgia’s acreage beginning in 2003, when it was introduced. The U.S. Environmental Protection Agency mandates that it be replaced by two-gene Bollgard varieties to reduce the possibility of worm resistance building up. Only a third of the 2009 supply of DPL 555 seed was available for 2010 planting. New varieties look promising but the jury is still out on ultimate performance.

“I hear a lot of farmers say they’ll plant as much 555 as is available. Irrigated farmers will probably still plant 555 on their dryland acreage. It’s something different and challenging for 2010. The new varieties look good, even yielding more than 555 with maybe even better quality, but we need to see how they handle heat and drought stress,” says Richey Seaton, executive director of the Georgia Cotton Commission.

Georgia’s cotton acreage decline over the past three years was less than that some other large-producing states. Georgians planted about a million acres in 2009. That’s down from 1.4 million in 2006.

“I feel we hit the bottom in Georgia in 2009 and acreage will be trending up a bit. The horrible harvest conditions we’ve had with the 2009 crop have been really difficult for everybody. But with price looking better and stocks being worked off, we’re seeing some positive things for cotton,” Seaton says.

“I just hope farmers watch the markets carefully and when the price is good, contract a portion of their production. We are going to see an increase in production in the U.S. and in other countries, too, so that could have an impact on markets,” Seaton says.

One of the most interesting 2010 cotton scenarios could take place in California, where acreage plummeted over the past several seasons as farmers switched land to permanent tree crops, corn, wheat and alfalfa. The state grew just 190,000 acres of cotton in 2009 but will almost certainly plant more in 2010.

Roger Isom, California Cotton Growers and Ginners Association executive vice president, says several growers who haven’t grown cotton in several years says they will again plant it in 2010. With cotton prices higher and silage, alfalfa, wheat and processing tomato markets depressed, making the switch back to cotton makes sense.

“It looks like we will have 250,000 to 290,000 acres of cotton in 2010. We could have 400,000 if growers can get the water allocated. Water could be the biggest thing that holds us back,” Isom says.

Another California development of interest is the new PhytoGen 805RF Pima variety being released by Dow AgroSciences and Monsanto offering Roundup Ready Flex for weed control. “That gives Pima the same weed control options as are available for Acala varieties. That’s appealing to growers,” Isom says.

If early indications hold true, 2010 could offer farmers the chance to profit on several key crops. If cotton launches a real comeback, benefits could be long-lasting in communities where gins and related industries depend on the crop. Until planters roll, we won’t know just how cotton stacks up against competing crops, however.

“Farmers have that flexibility to shift where the market dictates,” Shurley says.