How low will it go?

Click to view photos from NCC's 2015 annual meeting

The question of where cotton acres will wind up seems to have been at the forefront of most farmer conversations since they finished the 2014 harvest and began thinking about what crop mix they could plant to make money in 2015.

While it probably won’t be the definitive answer, industry observers at least got a clue to what might happen when the National Cotton Council released its 2015 Early Season Planting Intentions Survey at its annual meeting in Memphis today (Feb. 7). And, while growers responding to the survey in late December said they would plant nearly 15 percent less acres in 2015 than in 2014, the decrease wasn’t nearly as dramatic as some attending the NCC’s annual meeting expected. More than one Council delegate had said they wouldn’t be surprised if the number dropped below 9 million acres.

Still, it’s at least two months before the first seed begins to go in the ground in the central portion of the Cotton Belt, and a lot of things could happen to growers’ planting intentions between now and then as the NCC’s Gary Adams pointed out in presenting the survey results.

“Planted acreage is just one of the factors that will determine supplies of cotton and cottonseed,” said Dr. Adams, the Council’s vice president of economics and policy analysis. “Ultimately, weather, insect pressures and agronomic conditions play a significant role in determining crop size.”

9.2 million of upland

According to the survey, growers intend to plant 9.2 million acres of upland cotton, a 15.2 percent decrease from 2014’s 10.8 million acres. Producers in California, Arizona, New Mexico and Texas indicated they would increase their extra long- staple or Pima cotton by 22.8 percent to 236,000 acres.

The increase in Pima means growers could plant a total of 9.4 million acres of cotton, a decrease of 14.6 percent from 2014’s total plantings of 11 million acres.

Many producers, especially in the Mid-South, have been saying they planned to shift acres from cotton to soybeans because of disappointment with cotton prices over the last 12 months. December ICE cotton futures have declined 23.87percent from the contract high last April of 82.94 cents per pound.

Mid-South growers said they intend to plant 1.07 million acres, a 25.9 percent decline from 2014’s 1.46 million. The biggest decline could occur in Arkansas where farmers said they would plant 203,000 acres, a 39.4 percent decrease from 2014’s 335,000 acres.

Louisiana producers could plant 140,000 acres, a 17.9 percent decrease from 2014’s 170,000; Mississippi producers, 368,000 acres, down 13.5 percent from 2014’s 425,000; Missouri, 192,000 acres, down 23.3 percent from 250,000; and Tennessee, 176,000 acres, down 35.9 percent from 275,000 acres.

Growers in the Southeast told the National Cotton Council they planned to reduce planting by 10 percent from 2.67 million acres to 2.39 million acres, while respondents in the Southwest indicated they would plant 13.5 percent fewer acres for a decline from 6.47 million acres in 2014 to 5.6 million acres.

Steepest decline

The Far West would see the steepest declines with upland plantings in Arizona, California and New Mexico dropping 46.6 percent from 250,000 to 134,000 in 2015. That decrease would be offset somewhat by the 22.8 percent increase in extra-long-staple or ELS cotton from 192,000 to 236,000 acres.

Dr. Adams said that with average abandonment for the United States at 12.8 percent, Cotton Belt harvested area would total 8.2 million acres.

“Weighting individual state yields by 2015 area generates a U.S. average yield per harvested acre of 817 pounds. Applying each state’s yield to its 2015 projected harvested acres generates a cotton crop of 14 million bales, with 13.3 million bales of upland and 694,000 bales of ELS."

The NCC questionnaire, mailed in mid-December 2014 to producers across the 17-state Cotton Belt, asked producers for the number of acres devoted to cotton and other crops in 2014 and the acres planned for the coming season. Survey responses were collected through mid-January.

“History has shown that U.S. farmers respond to relative prices when making planting decisions,” said Adams. “Cotton growers are approaching the 2015 planting season with harvest-time futures contracts at the lowest level since planting of the 2009 crop. After more than five years of stronger markets, cotton prices fell sharply during the second half of 2014.”

Survey respondents throughout the Southeast indicated declines would occur in each of the region’s six states as cotton acres move into competing crops. Even with the expected reduction, the region’s cotton acreage remains well above the recent low of 1.89 million acres in 2009.

Peanuts, Soybeans

In Alabama, the survey responses indicate a shift to peanuts and soybeans, while Florida’s acreage is almost exclusively moving to peanuts. In Georgia, the acreage shifts are more varied with peanuts, corn and soybeans all expected to pull acres from cotton with South Carolina looking at a similar scenario. In North Carolina, the shift is to soybeans, while corn benefits from the modest decline in Virginia.

In the Mid-South, all five states responded with intentions to plant less cotton in 2015. Without exception across the five states, the respondents indicate that cotton acres will move into soybeans for 2015.

In Kansas in the Southwest, land shifting out of cotton is moving into corn and grain sorghum. Wheat is the expected beneficiary based on the Oklahoma survey results. In south Texas, respondents indicate a shift out of cotton and into grain sorghum.

Respondents from Texas’ Blacklands region are moving predominantly to wheat, with a smaller shift to corn. In West Texas, the acres shifting away from cotton are split between wheat, corn and grain sorghum.

Drought continues to have an impact in the West, resulting in the largest percentage reduction across the four production regions. The 2015 upland potential plantings of 134,000 represents a new low for recent history. The survey results for Arizona suggest a shift from cotton to wheat, as well as the ‘other crops’ category. Upland growers also indicate a shift to ELS cotton. In New Mexico, the cotton reduction coincides with responses indicating more acres of grain crops.

The increase in ELS cotton reflect both the fact that ELS prices remain more attractive relative to upland cotton and likely capture expectations during the survey period of improved 2015 water availability in California. Final acreage will be affected by actual water allocations, which remain uncertain. NCC delegates were reminded that these expectations are a snapshot of intentions based on market conditions at survey time. Actual plantings will be influenced by changing market conditions and weather.

For more on the Council’s Early Season Planting Survey, go to http://www.cotton.org/news/meetings/2015annual/plant.cfm