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Acreage decline forecast for cotton

The survey, which the Council said reflected growers’ thinking in mid- to late January, indicated that farmers would plant 14.7 million acres — 14.49 million of upland cotton and 247,000 acres of Pima — compared to 15.53 million total acres in 2001.

Most of the reduction would occur in the Mid-South states where producers responding to the survey said they were leaning toward reducing their plantings by 19.9 percent to 3.68 million acres when planting begins in April or early May. Mid-South growers planted 4.6 million acres last year.

“Cotton prices have fallen precipitously over the past year and would be consistent with a grower return of loan value or just slightly better for the 2002 crop,” said the Cotton Council’s Kent Lanclos. “Even ultra-efficient cotton growers will have grave difficulty turning a profit with prices this low.”

Lanclos said farmers in Louisiana and Mississippi appeared to be planning to make the lion’s share of the cuts, reducing plantings from 870,000 to 603,000 acres or 30.6 percent in Louisiana and from 1.62 million to 1.14 million acres or 29.4 percent in Mississippi.

Growers in Arkansas said they would lower their acreage from 1.08 million to 994,000 or 8 percent. In Tennessee, farmers said they would reduce plantings from 620,000 to 532,000 or 14.1 percent, while Missouri farmers planned to increase their acreage from 405,000 to 410,000 or 1.1 percent.

Growers in the West could decrease plantings 11.6 percent and in the Southeast 3.1 percent. Upland cotton acreage in the Southwest is projected to increase 1.6 percent because of higher acreage in Texas.

This was the 19th year in which the Council has conducted the survey by mailing questionnaires to a high percentage of producers across the Cotton Belt in early January. In most of those years, the survey has proven to be a good indicator of eventual plantings.

This year’s survey results were within the range of a group of analysts polled by the Oster Dow Jones News Service prior to its release. The 10 analysts predictions ran from a low of 14 million to a high of 15 million acres.

But one analyst said both the Council and the analysts’ projections could be too optimistic if the Grassley amendment passed by the Senate makes its way into the final farm bill.

“The possibility of plantings falling to 14 million acres is real, assuming the current Senate farm bill, as amended, is defeated,” said O.A. Cleveland, retired Extension economist with Mississippi State University. “Should that legislation become law, then 2002 plantings could fall to 13 million acres.”

The Grassley amendment would limit payments to $225,000 for a single farmer to and to $275,000 for a husband and wife if both are involved in the operation. It also would end the three-entity rule for payments and do away with generic commodity certificates.

Lanclos, assistant director of economic services with the NCC, said the lack of a farm bill only weeks before planting will begin makes any acreage predictions dicey.

“The failure of Congress thus far to enact new farm legislation has added an additional element of uncertainty to cotton acreage for 2002,” he said. “An uncertain farm policy environment, coupled with extraordinarily low prices and already weak balance sheets, has created significant financing difficulties for some growers, contributing to the expected reduction in cotton acreage.”

The economist stressed that many growers have few, if any, viable alternatives to cotton given that prices for alternative crops also have registered significant declines over the past year.

According to the survey, with average abandonment, total upland and ELS harvested area would be about 12.87 million acres. Applying each state’s average yield to its 2002 projected harvested acres generates a crop of 17.1 million bales, 16.6 million bales of upland cotton and 535,000 bales of ELS cotton.

“This compares to 2001’s total production of 20.08 million bales, according to USDA’s January 2002 estimate,” he noted. Cottonseed production for 2002 is projected to 6.5 million tons in 2002, down from 7.6 million tons the previous year.


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