As most of the Cotton Belt prepares to cut cotton acreage this year, growers in the High Plains could add as much as a 500,000 acres to 2007 plantings.
Steve Verett, executive vice president, Plains Cotton Growers Inc., in Lubbock, expects growers in zones 1S and 1N (the Southern High Plains and the Northern High Plains, including 39 counties) to plant around 3.50 million acres this year. That's up from 3.19 million last year, but short of the 3.9 million in 2006.
And that figure could change as the High Plains wheat crop moves into early spring. Much of the Southwest wheat acreage is in poor condition, hurt by severe drought that stretches from early fall into mid-winter.
“If much of that acreage is abandoned, farmers may plant cotton,” Verett says.
“Wheat and weather are still factors. Even irrigated wheat does not look good.”
He says a lot of farmers planted wheat behind last year's cotton. “If they don't get a rain quickly, they may abandon those wheat acres. We have a real question with wheat acreage. If we remain dry into mid-April, but receive spring rains, a lot of farmers may plant abandoned wheat to cotton. A lot of planting decisions will be made at the last minute.
“Fortunately, cotton, unlike some other commodities, will have an adequate seed supply for 2008. Nationally, cotton acreage will be down significantly.”
He says the National Cotton Council estimates plantings at 9.3 million acres, down from 10.5 last year. Some observers expect Mid-South farmers to back away from corn and follow fall-planted wheat with double-crop soybeans.
Farmers in the Texas Northern Panhandle may switch some acres back to cotton and away from corn, Verett says. “They will not abandon corn but high fertilizer prices and expense of irrigation will push some fields to cotton. They will not plant as much cotton as they did in 2006.”
He says a few growers will add peanuts to a cotton rotation, taking advantage of favorable peanut contracts this year. “But farmers with investments in cotton equipment and infrastructure will plant cotton.”
One factor favoring cotton in the High Plains is the improving cotton market. “We have a good opportunity to contract cotton,” Verett says. In late February, December futures prices hit 82 cents a pound.
“If we come into May and still see futures prices at 80 cents to 85 cents a pound, we'll have a good opportunity to lock in cotton prices at around 75 cents a pound. With that opportunity, we'll plant cotton.”
But farmers will need 75 cents to make money, he says. “This will be one of the most expensive cotton crops we'll ever make. Farmers seem cautiously optimistic. We are excited about the price prospects but everything we use to grow the crop is also up.”
He says the price of anhydrous nitrogen is around $700 a ton. Seed costs are also up. “By the time I pay for seed, technology fees and seed treatments, I have about $70 per acre. And when I add a yellow herbicide and fertilizer it is very expensive just to put the crop in the ground. It takes about 75 cents a pound to justify an average yield.”
Verett says the PCG area has been “blessed” the last few years. “The 2005 and 2007 crops were excellent, and we made a good irrigated crop in 2006. But bankers will not approve a budget based on exceptional yields. We've made good cotton for the past four or five years so folks may need to take a longer view.”
Even with high costs, Verett says cotton farmers are excited about the prospects. “This year growers have an opportunity to get most of their income from the marketplace instead of having to rely on support payments. That's the way they like it.”
He said growers will be cautious of expenses. “Most will wait to fertilize after seeing the progress of the crop. We don't have a lot of variable rate fertilization equipment in the area, but if prices of inputs stay up, folks will look at variable rate technology as a way of saving on fertilizer inputs. Growers will have to be on top of every bit of input and get the most bang for the buck.”
Verett says some gins will be running the 2007 crop into April, but says even the late cotton being ginned has held up with exceptional quality. Staple and leaf grades have been good.
“We've seen a lot of improvements in West Texas cotton quality over the past few years.”