California, Arizona and New Mexico cotton acres could drop by 13.2 percent in 2013, according to the National Cotton Council’s 30th Annual Early Season Planting Intentions Survey.
The Council’s estimate, based on its survey of growers across the Cotton Belt in late December and early January, said growers in the Far West could plant 536,000 acres of cotton, down from 618,000 acres in 2012.
Across the Belt, farmers indicated they intend to plant 9.01 million acres of upland and Pima cotton or 27 percent fewer acres than they did in 2012. The figures were released at the Council’s annual meeting in Memphis, Tenn., Saturday (Feb. 9).
Cotton farmers have been saying they would plant less cotton in 2013 due to lower cotton prices and higher prices for alternate crops. Since the survey was conducted, grain prices have softened somewhat while New York cotton futures have risen five cents per pound due to increased demand for cotton yarn.
(See related: 2012 cotton crop was record-making, heart-breaking)
“When we look at corn and soybean prices they are down about 10 percent from where they were when the survey started,” said Dr. Gary Adams, vice president for economic and policy analysis with the NCC.
“If the December contract for corn continues to inch down toward that $5 to $5.25 mark and gets down there, and we keep an 8 in front of the December cotton contract, I think we could see producers changing their minds a little bit.”
The NCC survey, mailed in mid-December 2012 to producers across the 17-state Cotton Belt, asked producers for the number of acres devoted to cotton and other crops in 2012 and the acres planned for the coming season. Survey responses were collected through mid-January.
“Projections by market watchers have been calling for reduced acreage in 2013, and the NCC survey agrees with those expectations,” Adams noted. “Cotton farmers are responding to market signals. Relative prices of cotton and competing crops have been the primary factor influencing U.S. acreage.”
Acreages of upland cotton are expected to decline in each of the growing regions – 18.5 percent in the Southeast, 24.4 percent in the Southwest and 12.2 percent in the West – but the 50.6 percent drop expected in the Mid-South is the most startling.
Far West expectations
In the Far West, growers in California are expected to plant 302,000 acres of upland and Pima, down from 367,000 in 2012; Arizona, 196,000, down from 203,000; and New Mexico, 38,000, down from 48,000.
California growers are expected to plant 112,000 acres of upland and 190,000 acres of Pima, continuing a trend that began with a move to Pima several years ago. That would be down from 142,000 and 225,000 acres in 2012.
Arizona’s upland acreage of 193,000 and Pima of 3,000 will be virtually unchanged from 2012’s 200,000 and 3,000 acres. Two years of extreme drought will again reduce New Mexico’s acreage, which could decline from 46,000 of upland and 2,000 of Pima to 36,000 of upland and 2,000 of Pima.
Assuming slightly above-average abandonment in the Southwest region due to the dry conditions and all other states set at historical averages, the survey indicates total upland and ELS harvested area nationwide would be 7.65 million acres, 15.2 percent below planted area. Applying state-level yield assumptions to projected harvested acres generates a cotton crop of 12.86 million bales, compared with 2012’s total production of 17.01 million bales.
“Planted acreage is just one variable determining final production,” Adam notes. “Weather is often a more significant determinant, particularly weather developments in the southwestern U.S. With this in mind, we could see the U.S. crop ranging from a low of 9.5 million bales to a high of 17.0 million bales. ”
Survey responses said that corn accounts for slightly more than half of the planned decline. Soybeans account for the remainder of the decline in acres, with many of the soybeans being double-cropped with wheat.
“Based on USDA costs of production and trend yields, the shortfall between cotton net returns and returns for corn and soybeans is substantially larger than in 2009 – the most recent low in acreage,” noted Adams, who presented the survey results at the opening of the Council’s committee meetings.
In the Mid-South, growers are expected to reduce their acres in half from the 2.03 million acres planted in 2012. The largest decline is projected in Arkansas where growers could plant as few as 221,000 acres in 2013, compared to 595,000 acres in 2012.
Southwest growers are indicating total upland acres of 5.23 million, down 24.4 percent from last year. The respondents planting less cotton said they intend to move those acres into grain sorghum, wheat and corn, in that order. The survey indicated that some producers are planning to increase cotton, with some of those acres coming from grains but the larger reason underlying the increase appears to be weather. Growers unable to plant last year due to drought conditions are expecting to sow more acres in 2013.