U.S. producers have told the National Cotton Council they intend to plant 8.11 million acres of cotton this spring, a decrease of 14 percent from 2008 that would continue a trend that began when corn prices hit $4 a bushel in 2007.
The numbers from the NCC's 26th annual Early Season Planting Intentions Survey include upland cotton intentions of 7.97 million acres, also a decrease of 14 percent from 2008, and extra long staple intentions of 142,000 acres. The latter represents a 19 percent decline from 2008.
The results of the survey, which was mailed to producers in mid-December, were announced by the Council's economics staff at the NCC's 2009 annual meeting in Washington , D.C. The Council collected survey responses through the middle of January.
Assuming an average abandonment rate of 9.4 percent, total upland and ELS harvested area would be about 7.35 million acres. Applying state-level yield assumptions to projected harvested acres generates a cotton crop of 12.76 million bales, compared to 2008's total production of 13.04 million bales.
Assuming average seed-to-lint ratios, 2009 cottonseed production is projected at 4.35 million tons, down from 4.43 million last year, according to the survey.
Based on survey results, all four regions could decrease upland cotton planting area compared to last season. The West and Mid-South show the largest percentage drops of 31 and 23 percent, respectively. Smaller reductions of 18 and 9 percent are expected in the Southeast and Southwest, respectively.
More than 50 percent of the U.S crop was reported to have been planted in the Southwest, primarily in Texas, in 2008. The only two states indicating upland expansion were Kansas at 7 percent and Florida at 3 percent.
Some growers believe the Cotton Council number could prove to be low, depending on where grain futures are trading by March or early April. They think the U.S. cotton acreage could be higher due to falling grain prices.
“I think I'm seeing a lot of indecision on the part of our farmers,” said one producer delegate to the NCC annual meeting. “Growers won't really know what they will plant until they get closer to planting time this season.”
Another producer said many farmers — particularly in the lower half of the Mid-South — are faced with some tough decisions after harvesting a much smaller than expected crop in 2008. Heavy rains just prior to harvest cost many of them dearly.
“As growers look at expected returns when comparing prices for cotton against competing crops, they will be influenced by lower fuel and fertilizer costs along with agronomic considerations, such as crop rotation and weather conditions in Texas, California and parts of the Southeast,” said Dale Cougot, NCC senior economist.
“Growers will continue to monitor relative crop prices over the coming weeks. USDA's latest grain estimates, showing an increase in stock levels, highlights another major influencing factor this year. Also, the ratio of crude oil at $45 per barrel to corn at $4 per bushel does not foretell profitable ethanol production.”
Survey respondents through the Southeast indicated declining acreage, except for Florida at the expense of peanuts. Alabama reported the largest percentage reduction at 33 percent, followed by Virginia at 23 percent and Georgia at 17 percent. These three states' survey responses showed shifts to both corn and soybeans. South Carolina and North Carolina plan cutbacks of 18 percent and 12 percent, respectively, as growers primarily shift to soybeans.
Results for all of the Mid-South states, except for Tennessee's expected 4 percent decrease, signified sharp declines around 25 percent. The majority of growers' intentions are to transfer to soybeans. The largest Mid-South state decreases were seen in Arkansas (-29 percent), Mississippi (-27 percent), Louisiana (-26 percent) and Missouri (-24 percent).
Texas growers expressed intentions of reducing area by 9 percent to 4.5 million acres. The other regions' reductions of relatively more acreage implies Texas' share of the total upland area is expanding, now more than 57 percent, up from 54 percent.
“This will entail a wider variance in abandonment acres as crop estimates are prepared for the season,” Cougot said. He noted that only modest adjustments were in Kansas (plus 7 percent) and Oklahoma (minus 2 percent).
The Western region showed a projected 31 percent reduction. California upland planted area intentions presented losses of 55 percent — the largest percentage decline of all Cotton Belt states. This stems from ongoing concerns over water availability, and reflects some producers' opting to change to specialty crops. Survey respondents also revealed that Arizona and New Mexico growers intend to decrease upland area by 7 percent and 40 percent.
Adjustments in the four states producing extra long staple or Pima cotton indicated mixed reviews with declines in California and New Mexico partially offset by gains in Arizona and Texas.