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Cotton: Arkansas turnaround

Higher cotton prices may help erase a few bad memories from 2009 and lead to an increase in acreage in Arkansas for 2010, according to the University of Arkansas Division of Agriculture.

Private estimates indicated that total U.S. cotton acreage will be in the range of 10 million to 10.5 million acres, compared to 9.15 million a year ago. Meanwhile, the December 2010 futures price for cotton is trading at 75 cents per pound.

Arkansas’ 2010 cotton acreage is expected to increase from 520,000 acres in 2009 to between 560,000 and 580,000 acres, depending on the price, according to Tom Barber, Extension agronomist-cotton, and Scott Stiles, Extension economist-risk management, both with the UA Division of Agriculture.

The March 31 estimate from the National Agricultural Statistics Service projects 520,000 acres for Arkansas, unchanged from last year. The report agreed with private estimates on acres of cotton nationwide. NASS figures are based on the 2010 March Agricultural Survey by USDA. Growers were surveyed during the first two weeks of March.

“Cotton prices are 20 cents per pound higher today than one year ago,” Stiles said. “That translates into $220 per acre assuming an 1,100-pound yield.”

If prices rise to the 80-cent range, acreage could reach 600,000, but even with higher prices, cotton isn’t expected to reach the million-acre mark as it did in 2006, Barber said.

Acreage isn’t expected to expand much in south Arkansas.

“Everyone lost yield last year, but the producers hurting the most were south of I-40,” said Barber. “There’s a bad taste in the mouths of growers in southernmost cotton counties.”

Barber said some of those acres may turn to corn, if the prices are right.

World cotton stocks-to-use levels are the lowest since the mid-1990s.

“Cotton prices have increased sharply over the past year due to decreasing supplies, due partly to acreage loss and increased mill use,” Stiles said.

U.S. cotton production from the 2010 crop will likely be near 16 million bales, with total use — encompassing exports and mill use — remaining about the same.

“That results in virtually no change in U.S. ending stocks, which are currently projected at 3.2 million bales by the USDA.

“Given the tightening supply both here and around the world, significant production problems could push December ’10 futures to the low- to mid-80-cent level. The question then becomes, ‘Will demand for cotton hold up given higher prices?’ A lot depends on the world economic situation improving.”

The first cotton was expected to be planted around April 15 in southeastern Arkansas. For fields in the rest of the state, planting will likely be from the last week of April through May 20.

“The best emergence happens with plantings around the first week of May when soil temperatures are consistently warm enough,” Barber said. “That’s especially true for northern Arkansas — where it takes longer for soil temperatures to warm to optimum levels for rapid germination and emergence.”

TAGS: Cotton
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