College Station, Texas
March 30, 2007
Fueled by ethanol demand and
strong export sales, U.S. corn acreage is predicted to be the
largest since 1944 with Texas plantings to increase by as much
as a quarter of a million acres in 2007, the U.S. Department of
Agriculture reported today*.
Cotton, the state's number one
cash crop, is predicted to drop in acreage by 11 percent or more
than 600,000 acres, according to the report. Cotton producers
across the state are expected to plant just over 5.73 million
acres compared to 6.43 million acres in 2006.
"The first thing to say about it
is this is sort of a benchmark on acreage and nobody should take
it as a final deal," said Dr. John Robinson,
Texas Cooperative
Extension cotton marketing economist.
Weather so far has not been a
determining factor for agriculture production in Texas, but lack
of rain could alter the number of crop acres planted and yields.
State agriculture producers are hoping there isn't a repeat of
2006 when crops across the state were ravaged by drought.
"Things have already changed in
the last 30 days (regarding weather)," Robinson said. "It's
gotten drier in the mid-south. There's a whole lot of variables
between now and the next (USDA acreage report) on June 30 when
they go out and survey actual acreage."
Prospective corn plantings
statewide are predicted to be 2 million acres compared to 1.76
million acres in 2006, according to estimates.
"If we get a good crop year, it
could provide some good returns to producers," said Dr. Mark
Waller, Extension economics program leader. "In terms of dryland
production, we hope it gets the moisture it needs. The moisture
situation has improved since last fall, but we don't have a lot
of sub-soil reserves. It sounds like things are getting
(planted) in the lower part of the state, but we still need good
moisture."
Though Texas corn acreage is on
the increase, Waller advises producers not to rest on their
laurels if they're anticipating high returns on a large crop.
"While it looks like we'll be
planting more corn this year and we've got some good potential
in prices, producers need to be thinking about what to do in
terms of production and price insurance," he said. "If you've
planted a lot more corn, don't just sit back and think (prices)
will keep going up. Watch the market. When you get some decent
pricing opportunities, take advantage of them."
Texas produced more than $561
million worth of corn for grain in 2006, according to
agriculture department data. That figure could increase
dramatically in 2007 with the potential for larger yields and
record-high corn prices.
"I expect to see a corn crop we
haven't seen in a while," said Dr. Travis Miller, Extension
program leader for soil and crop sciences. "There's rains in the
Plains (region) today and the (Central Texas) Blacklands. If
people have got it planted, that's perfect timing."
U.S. corn growers intend to plant
90.5 million acres of corn in 2007, up 15 percent from 2006 and
11 percent higher than 2005, the agriculture department reports.
By comparison, it would mark the highest number of acres since
1944 when 95.5 million acres were planted. Expected acreage is
up in nearly all states as high corn prices are encouraging
farmers to plant more acres in corn.
Nationally, Illinois farmers are
predicted to plant a record-high 12.9 million acres of corn this
spring, up 1.6 million acres from a year ago, while North Dakota
(increased 910,000 acres) and Minnesota (increased 600,000
acres) as growers are expected to plant a record number of corn
acres.
The drop in Texas cotton acres is
in response to the change in corn acreage and the trickle effect
on other planted commodities including sorghum and soybeans,
economists said.
Some Texas farmers are shifting
cotton acreage to corn acreage in the Central Texas Blacklands,
Wharton and Lower Rio Grande Valley regions to take advantage of
the prices, Robinson said.
"But mainly, it's a question of
shifting to grain sorghum or wheat," said Robinson, noting the
demand for corn is altering the number of planted acres for
other commodities, thus changing the supply-demand equation.
Electronic cotton market contracts were trading above 60 cents
early Friday.
"The market is still going to
grind on and in the short term, there could be a price rally,"
Robinson said. "If someone were forward-pricing, they may be
able to lock something in. To my way of thinking, we need a
rally of up to three to four cents for it to be a meaningful
opportunity."
U.S. cotton plantings for 2007 are
expected to total 12.1 million acres, 20 percent below 2006
levels and the lowest since 1989, the agriculture department
reports. Growers intend to decrease planted area in all states
with the largest acreage declines in Arkansas, Georgia,
Louisiana, Carolina, Mississippi and Texas.
*http://usda.mannlib.cornell.edu/usda/current/ProsPlan/ProsPlan-03-30-2007.pdf
Writer: Blair Fannin |