New era at hand for U.S. and California cotton

These are interesting times for U.S. and California cotton. A week at the Beltwide Cotton Conferences in San Antonio, Texas provided contrasts between California and the rest of the U.S. Cotton Belt as well as insight into major changes for American cotton.

First California. The apparent is that California's future is Pima cotton. Extra Long Stable cotton is in unprecedented demand worldwide. Prices of $1.20 to $1.30 per pound have California seed suppliers increasing acreage projections upward. It may reach 400,000 in the San Joaquin Valley this season. Just last fall, the top end of projections was 350,000 acres.

California is in the ELS driver's seat worldwide. Other countries produce ELS cotton, but many are unreliable suppliers or there are quality issues not associated with American Pima. Also, Supima's branding program is forcing mills throughout the world to use American Pima from California, Arizona, New Mexico and Texas.

SJV Acala? It may fall to 250,000 in ‘06 but no one wants to see that. SJV Acala remains one of the world's finest upland cottons, but others styles, like the rapidly growing Fibermax varieties are gaining on Acala quality and taking SJV markets. Also, the cost of farming in California is driving upland cotton off the land, replaced by almonds, grapes, vegetables and other higher value crops.

The California cotton industry is far from dead, although acreage has plummeted over the past decade to less than half of what it once was. It is just different — and thank goodness for Pima. The only thing left to ponder is what would have been if Pima had come into California 20 years earlier as it should have.

In contrast to California, the U.S. produced a huge upland crop last year and indications another one is possible this season. Upland acreage and production are not falling like they are in California. This is being fueled largely by growing world demand for cotton. However, this demand is on a collision course with a U.S. cotton support program that seems to be politically scheduled for dismantling. The world's textile mills may want U.S. cotton, but can American cotton farmers afford to produce it?

There are the obvious hand wringers who are forecasting doom without the current federal farm program. However, others are saying there are pricing opportunities for U.S. cotton unleashed from federal farm programs.

Economists like Carl Anderson professor and Extension specialist emeritus, Texas A&M University, have been preaching the gospel of better marketing to producers. Some have become believers. Others had better if they plan to stay in the cotton-growing business.

Already there are 20 to 25 cents per pound spreads in futures prices in cotton marketing years. If the farm program disappears there will likely be even more volatility. And volatility translates to profit opportunities.

The National Cotton Council will fight until the last vote in Congress to maintain foundational federal cotton program, but it is looking like U.S. cotton farmers had better buy new running shoes to keep up with a new cotton marketing era offering more twists and turns than a jackrabbit trying to escape a hunter's rifle shot on the West Texas Plains.

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