Experts peg U.S. cotton crop at 17.7 million bales __________________________________________________ ! U.S. cotton farmers are on pace to produce a 17.68 million bale crop this season, according to current estimates from a panel of analysts speaking at the Ag Market Networkas annual Cotton Roundtable in New York City. Southwest According to Extension specialist emeritus Carl Anderson, the Texas crop condition is much better than a year ago. aFollowing three years of drought, timely rains from late May up to mid-July have saved the west Texas 3.5-million-acre dryland crop from another major disaster. The roughly 2 million acres of irrigated cotton is doing exceptionally well.a Anderson said the west Texas dryland crop ais off to a late start and needs timely rain and warm temperatures until mid-October. Most of the area is short on both topsoil and subsoil moisture. The crop needs sunshine and favorable daytime temperatures.a According to USDAas Texas cotton crop condition index, the crop is rated as 8 percent very poor, 15 percent poor, 40 percent fair, 27 percent good and 10 percent excellent. aFortunately, in July most of the west Texas area is receiving much needed rainfall. In the Coastal Bend area and the Blacklands area of south Texas, where some of the most productive dryland exists, cotton is in above average condition.a Anderson says cotton harvest is underway in south Texas, with quality expected to be excellent. aBecause of limited subsoil moisture, localized storms, and persistent weed problems, I estimate about 20 percent of the projected 6.45 million acres planted in Texas in 2014-15 will be abandoned.a Anderson projects a Texas crop potential in the range of 7 million to 8.3 million bales, adepending on weather conditions between now and mid-October. Today, my production estimate for Texas is around 7.6 million bales, compared to 4.2 million last year.a Anderson said Oklahoma growers planted 240,000 acres of cotton and expect to produce about 300,000 bales. aTheir crop is in good condition. In Kansas, growers planted 43,000 acres that are in good condition and may produce some 60,000 bales. Anderson estimated total production for the Southwest at 8 million bales. Far West According to Jarral Neeper, president of Calcot, Ltd., the total of upland and Pima acres in California and Arizona, at 365,000 acres, ais the smallest number of acres across these two states since the 1930s. The single biggest factor is the decline in water availability. California is in its third consecutive year of well-below average winter snowfall, which has led to a severe decline in reservoir levels. aIn addition to that are the legislative drought conditions imposed by the Environmental Species Act, which certainly favors a 3-inch bait fish over the needs of several thousand farmers and ranchers, as well as the nutritional needs of a nation.a Neeper said there has also been a noticeable shift to permanent crop plantings in the San Joaquin Valley, such as almonds, pistachios and grapes. aIn reality itas a little unfair to blame the decline of cotton acres completely on water, but it is true that had there been more water available, there wouldave been more cotton acres.a Arizona also has water issues, Neeper said, abut not nearly to the extent as California. However thatas likely to change in the next few years as water availability from the Central Arizona Project will be curtailed for agricultural purposes.a Neeper pegged New Mexicoas cotton acres at around 30,000 acres of upland and 5,000 acres of Pima. Irrigated Pima acres south of El Paso, Texas number around 13,000 acres. aCrop conditions in California are very good. Insect pressures have been very light and fruit retention has been fantastic. In general, the crop is about two weeks ahead of schedule. The only concern is in the central part of the Valley, some of the wells are already starting to drop off, so the worry is having enough water to finish the crop.a In Arizona, crop conditions have also been very favorable, according to Neeper. aInsects have been light this year and the crop is several days ahead of schedule. In New Mexico and south of El Paso, the crop is doing well but is a little bit behind schedule.a With good yields expected, Neeper estimates upland production in California Arizona and New Mexico at roughly 740,000 bales and Pima, at about 545,000 bales. That would bring total cotton production in the area to 1.285 million bales, versus 1.507 million bales a year ago. Mid-South and Southeast According to professor emeritus O.A. Cleveland, the Mid-South and Southeast cotton crops have caught up from a late start. aA lot of the crop has already laid by, and weare just marking time now, waiting for heat units and the timely moisture to develop the fruit thatas already been set. Boll set in has been exceptional. Cleveland estimates 5.2 million bales of production in the Southeast abased on what we see today.a He estimates a Mid-South crop of 3.2 A million bales. Good weather is bad: Cotton prices tumble as U.S. producers expect bumper crop ______________________________________________________________________________ ! U.S. cotton producers, it would seem, just canat stand prosperity. I just read through the economic outlook inthe most recent newsletterA from the Memphis-basedA CottonA Board in whichA Jon Devine, a senior economist withA Cotton Inc., does a good job of explaining the current outlook for cotton prices going forward. It’s not so pretty. Cotton prices are currently tanking, with December futures trading at something close to five-year lows. The short explanation for this is just Economics 101: investors are expecting a huge supply that will almost certainly outpace demand for the fiber in the coming year. The reasons behind the unbalanced supply/demand scenario are slightly more complicated, of course. But it goes something like this: For the past few years China a the world’s biggest cotton importer a has been supporting cotton prices because it has been stockpiling vast reserves of the fiber. Meanwhile the U.S. a the world’s biggest cotton exporter a has seen its production limited during this same period due in large part to the severe drought in Texas and the Midwest (but mainly Texas). Well, this year the Chinese have decidedA they may have stockpiled just about all the cotton they need. Anytime your biggest customer dials back buying it’s bad, but making matters worse this year is that it finally started raining in West Texas. Buoyed by good weather, U.S. growersA are expected to produce millions more balesA of the fluffy white stuff this year a just in time for the Chinese to say aNo thanks; weare good.a The result is December cotton futures trading at 65 cents per pound, withA some reports saying that 50 cents is a real possibility. To put the price drop into perspective, at about this time last year prices for December cotton wereA hovering around 90 cents per pound. Anyone selling a product that loses almost a third of its value so quickly is probably going to be in for a tough year, and that’s what U.S. growers a and investors a are facing in 2014. If there is a silver lining to the current scenario,A DevineA says, itas that the lower prices for cotton could make the fiber more competitive with lower-priced synthetic fiber. aIn the past few years it has been tough for cotton, price-wise, compared to polyester,a he says. aMaybe when we do see the prices decrease in the coming year, that will encourage mills to move back to cotton Cotton is Produced in the U.S. for the Purpose of Export ________________________________________________________ ! A With the significant decline in cotton use by U.S. mills since the late 1990s, exports now account for about 75 percent of the demand for U.S. cotton, making global market developments key to the outlook for U.S. producers. The source of demand for U.S. cotton shifted with the elimination of textile and apparel import quotas that existed under the international Multifiber Arrangementaa process completed in 2005aleading to increased U.S. imports of textiles and apparel and reduced U.S. demand for raw cotton. Since 2005, there has been significant variability in the volume of U.S. exports and in world prices, much of it attributed to developments in China, the largest global and U.S. market for cotton. Large Chinese purchases contributed to the spike in world prices in 2010/11 (August/July), while large stocks and reduced buying by China are key factors in the outlook for reduced global and U.S. exports in 2013/14. Mill use of cotton in China has now declined for four consecutive seasons in response to government policies, with more consumption shifting to countries such as India, Pakistan, and Vietnam, who are exporting growing volumes of cotton yarn and other intermediate products to China and other markets. Cotton futures are trading 58 to 78 points lower. Cert stocks dropped to 164,719 bales, with 11,654 decerts and 0 new certs. USDA on Monday reported that 87% of the crop is squaring, vs. the 89% average and 87% last year. They show 49% setting bolls vs. only 37% a year ago at this time. Condition ratings improved 4 points on the Index, with 54% of the crop rated good or excellent. The WASDE estimate for 2014 average yield is 816 pounds/acre, which would be down from the two previous years (887 and 821 respectively). NASS has begun data collection for the Crop Production r eport. It will be released on August 12.
Posted on: Tue, 29 Jul 2014 17:36:37 +0000
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