How much cotton will be planted in 2016 Next estimate expected March 31

How much cotton will be planted in 2016? Next estimate expected March 31.

COTTON SPIN: How much cotton will be planted this year?

Cotton plantings report important to producers, ag industry Key report due March 31

Cotton planting season has already started in South Texas and will continue across the Cotton Belt into June. It is also the season for forecasting how many acres will be planted, which agribusinesses need to know for planning purposes. Market analysts and government officials also need to know to project production, supply, ending stocks, and price possibilities. 

We already have a few benchmark estimates to work from, and another is on the way.  First, the National Cotton Council released the annual estimate reflecting grower intentions around the New Year, when cotton futures were still in the mid-60s. The NCC forecast was for 9.1 million acres of U.S. all cotton (upland and Pima combined). It indicated 25 percent increases to the relatively small 2015 acreage in the Far West and Mid-South regions. 

The NCC also forecasted a 6 percent year-over-year increase in Texas, reflecting replacement of 2015 cotton prevented plantings with cotton. Lastly the NCC forecasted a 5 percent decline in Southeastern plantings due to projected shifts to more corn and soybeans.

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A second benchmark came with USDA’s Outlook Forum, circa February 26, where they forecasted 9.4 million planted acres of all cotton. In addition to replacing prevented plantings, the USDA forecast assumes some additional acreage shifting to cotton from land planted to grain crops in 2015 grain.

The next benchmark will be USDA’s Prospective Plantings report. This report is based on grower surveys conducted in March and will be released March 31. Thus this survey should reflect updated grower intentions, and particularly it should measure any impacts of the recent slide in new crop cotton futures below 60 cents. The final benchmark will be USDA’s June survey and report on actual planted acreage.

As indicated in the reports that we already have, year-over-year changes in cotton plantings may be due to market forces. They also occur in response to weather and policy influences. These forces sometimes result in last minute changes in grower intentions. For example, early in 2007 a dramatic rise in corn prices likely led some growers to plant less cotton in 2007 than they had previously intended. This is evident in Figure 1 by the blue line (New Year intentions) exceeding the red line (actual plantings). The opposite effect occurred in 2011 when the combination of high prices and historically severe drought conditions induced a lot more cotton plantings than were indicated earlier in that same year.  

OTHER CROP OPTIONS?

High competing crop prices or drought responses do not appear to be likely major influences in 2016. Perhaps peanut plantings will claim some cotton ground at the margin.  In the meantime, I don’t see what will significantly add to or subtract from current projections that we have in the 9 to 10 million acre range.  Assuming average yields and abandonment, we could therefore have from 13.7 to 15.2 million bales of production. That would mostly put the U.S. cotton balance sheet in a neutral stocks outcome, suggesting more of the same in terms of prices. The possibility of a summer-time weather market rally is still there if we have poor growing/maturation conditions on a low planted acreage. 

For additional thoughts on these and other cotton marketing topics, please visit my weekly on-line newsletter at http://agrilife.org/cottonmarketing/.

Figure 1
 
   
   

 

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