Mississippi State, Mississippi
May 9, 2008
Cotton offers strong profit
potential for growers even though it no longer rules as king
among the state’s row crops.
In 2008, two crops are posting more acreage in Mississippi than
cotton’s predicted 420,000 acres: soybeans, with 2.05 million
acres, and corn, with 670,000 acres. Exceptionally strong
markets have lured growers away from their reliable favorite and
over to grain crops.
“Cotton should be a profitable crop this year, just not as
profitable as some of the other crops,” said Steve Martin,
agricultural economist at
Mississippi State University’s Delta Research and Extension
Center.
Last year, cotton prices averaged 47.8 cents per pound. This
year, December futures prices are near 80 cents per pound during
the first week of May.
“With our carryover of 10 million bales, we would not have
80-cent cotton if it weren’t for the national acreage
reduction,” Martin said.
“Even on reduced acreage, we will produce more cotton than we
use domestically, which is about 4.5 million bales.”
The United States exports about 14 million bales annually. Total
U.S.
production last year was about 20 million bales. A smaller
carryover is expected next year, which should inspire growers to
return to their first love, cotton.
Martin said weather in west Texas will dictate to what degree
cotton supply is reduced within the next cropping year.
“Those growing cotton this year should not be in any hurry to
price it, as weather scares throughout the growing season will
likely result in price spikes. The downside risk is probably now
less than upside potential,” Martin said.
MSU Extension cotton specialist Darrin Dodds said Mississippi’s
cotton is behind schedule because of the cool, wet weather. The
U.S. Department of Agriculture’s weekly crop report released May
4 by the National Agricultural Statistics Service indicated that
Mississippi’s cotton is
14 percent planted, compared to the five-year average of 54
percent.
“Fewer acres for the state mean we will be able to get planted
quickly when field conditions improve,” Dodds said.
“The cotton that is in the ground is not growing very fast
because of weather conditions,” Dodds said. “That increases the
chances of diseases, but most have had seed treatments to offset
the risk.”
The USDA report indicated that 5 percent of the cotton has
emerged, compared to the five-year average of 28 percent.
Dodds said the significant reduction in cotton acres brings
infrastructure concerns, including the impact on gins.
“It’s hard to gauge what will happen,” Dodds said. “Some gins
that were open last fall may not open this year. If there are
not enough acres in the area to run, they won’t run.” |
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