Arkansas’ cotton acres are expected to sink to a new low – below 200,000 acres – due to weather delays and depressed prices.
Back in March, USDA’s “Prospective Plantings” report estimated Arkansas’ cotton acreage at 230,000, a 31 percent decrease from 2014. What actually goes into the ground will be revealed in the June 30 “Acreage” report. The previous record low in planted acreage is 310,000 acres, set in 2013.
“Absolutely, positively no doubt we’re at an all-time low. We shattered our old low,” Bill Robertson, extension cotton agronomist for the University of Arkansas System Division of Agriculture, said Wednesday.
A good indicator, he said, was the estimate from the Arkansas Boll Weevil Eradication Board, which had to make its own assessment of acres in its program.
The director “told me this morning that what they have is 198,500 acres,” he said.
Robertson said the reduction in the state’s cotton acreage isn’t concentrated in any single area.
However, “where gins own land, they’re going to encourage their farmers to grow cotton,” he said. “In northeastern Arkansas, we have a higher percentage of gin-owned land. There, we’ll see fewer acres shift.”
Back when corn was going for $8 a bushel, the gins gave renting farmers more flexibility on what to farm, as corn was a good crop to rotate with cotton.
“Economics are driving this. You can’t run corn through a cotton gin. You’ve got to run cotton through a cotton gin,” Robertson said.
Rain on top of more rain kept farmers and cotton seed out of the fields this spring.
“At the beginning of May, we had a fifth of the crop planted and as of May 31, we hadn’t yet completed cotton planting,” said Scott Stiles, extension economist for the University of Arkansas System Division of Agriculture. “Once you’re into June, odds are you’re not going to set any yield records. As of June 1, we still had 8 to 10 percent of our cotton left to plant. That amounted to 18,000 to 20,000 acres. I have doubts all of that was actually planted.”
The outlook for cotton on the market hasn’t been very bright either. Last year, the price per pound peaked at 84 cents in the first week of May 2014. “We’re well under the highs we saw last May in the December contact,” Stiles said. “This year, the highest trade during the month of May for the December 2015 contract was 66.99.
“I’d say 90 percent of our year-to-year decline in acres is attributed to low prices,” he said.
Stiles said that for the Mid-South region – Arkansas, Louisiana, Mississippi, Missouri and Tennessee — the National Agricultural Statistics Service March planting intentions indicated that cotton acreage would be down 400,000 acres or 27 percent from 2014. “Considering the planting delays during May, I suspect we’ll see further reductions in Mid-South cotton acreage in the range of 55 to 60,000 acres,” he said.
China and cotton
China has been something of a “frenemy” to U.S cotton growers. Its enormous government stockpile of cotton – 65 million bales, or 60 percent of the world’s reserves — has helped keep prices low worldwide.
However, “China is still our top market for upland cotton,” Stiles said. “Through June 11 we’ve sold them 2.3 million bales in the 2014 marketing year.”
Vietnam is the next best market at 1.6 million bales, with Turkey right on its trail with 1.5 million bales.