Cotton acres began creeping back up last year and are expected to rise again in 2011. So what has to happen this year to keep producers interested in continuing to ride the cotton bandwagon not only in 2011 but also in looking toward future seasons? This question was posed to a Mississippi producer, an Arkansas producer and a Louisiana producer to get a Mid-South perspective on this query.
The dominant reply is tied to price – not just cotton prices, but grain prices as well. Kenneth Hood, who farms near Gunnison, Miss., says, “It’s going to take the right price to keep cotton’s momentum going, particularly with corn prices on the rise and soybean prices really strong.”
The Mississippi producer points out that many people have bought grain harvesting equipment and will continue to plant some grain in order to make their payments. However, he notes, “If the price stays at 90 cents or better, I think you will see farmers who kept a picker under their sheds, and particularly those who planted some cotton, increase their acres.”
In the southern one-third of Arkansas, as well as in Louisiana and Mississippi, which all experienced weather problems in the fall of 2008 and 2009, producers say cotton has to offer something attractive for them to be willing to continue to take on the risk associated with this crop.
“Price is going to be very important in the move from beans into cotton and to some degree corn,” says Arkansas producer Steve Stevens. “This season, most of us probably didn’t get much dollar-plus cotton that the market offered in the fall. I have booked a good bit of Dec 11 crop at 90.50 cents board, giving me 30 cents over loan. Assuming normal grades, this will be about 83.50 cents net.”
Wade Hargrave, who farms in Mound, La., near the Mississippi River, agrees with Hood and Stevens.
“With bean and corn prices where they are now, cotton is going to have to stay up to about $1 per pound to compete with the grain,” he says.
Reap Rotation Benefits
Another factor that can drive some farmers to cotton, particularly in the Mississippi hill area, is the extremely hot, dry 2010 season where a lot of people were disappointed in their grain yields, according to Hood.
“In the hill area, cotton held up through the drought and heat, and almost everyone I talked to had good yields on cotton,” he says. “I think that is going to sustain cotton to a certain degree, especially in that area.
“Also, rotation will take place,” he adds. “Some producers who have been planting grains want to rotate back to cotton now because there is a pretty good assurance that if you rotate cotton behind corn, you are going to have an increase in yields.”
Stevens reminds farmers who are rotating cotton back into ground that has been in corn and/or soybeans for a couple of years to make sure their soil samples are current.
“Soybeans take out a lot of potash, and corn pulls a lot of phosphorous,” he says. “If you don’t have up-to-date soil samples, you should probably put it on your to-do list.”
Match Soils For Best Yields
When asked what keeps him in cotton besides price considerations, Hargrave says, in his case, certain crops yield better on particular soils. For example, on his heavier ground (black ground), his top-end corn may yield 150 to 160 bushels, whereas corn on his sandier ground may yield 200 bushels or better.
“Cotton seems to do better on my black ground than it does on sand,” Hargrave explains. “It yields better, and I don’t have to spend as much money on a plant growth regulator. I will rotate some of the cotton to corn on the black ground just to get the benefit of rotation, but the next year it goes back into cotton.”
As far as the role of U.S. export markets and supply and demand, Hood quickly notes, “That’s probably the driving force not only for cotton, but grains, too. The rest of the world is demanding more food and fiber, and I think that’s why we are seeing increased commodity prices.”
Of course, the question on everyone’s mind is, “Will it last?” Although Hood is an experienced producer, he won’t commit to any long-term predictions. But, he does believe that for the next 12 to 24 months, the industry can look for some pretty substantial prices.
Contact Carroll Smith at (901) 767-4020 or email@example.com.