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Cotton harvest could depend on an El Nintildeo coming in this summer
<p>Cotton harvest could depend on an El Ni&ntilde;o coming in this summer.</p>

Timing of El Niño rains matters a lot for 2014 crop

The predictable and potentially significant effects of El Ni&ntilde;o rainfall patterns on global cotton production are from drier weather in Australia and Central India, and wetter weather for the U.S. Cotton Belt.&nbsp;

The possibility of an El Niño weather pattern has been grabbing a lot of recent headlines.  El Niño weather patterns involve warming Pacific water temperatures, which result in deviations from normal rainfall across the globe.  The predictable and potentially significant effects of El Niño rainfall patterns on global cotton production are from drier weather in Australia and Central India, and wetter weather for the U.S. Cotton Belt. 

National Weather Service forecasters still put the odds at 50:50 for an El Niño beginning around mid-2014 or later.  Australian forecast the likelihood of an El Niño pattern at 70 percent, and other private meteorologists are publishing similar odds.  That suggests that moisture may be coming to the South Plains, but whether it hurts or helps the 2014 crop depends on the timing. 

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For growers in South Texas, the arrival of mid- to late summer rains is obviously not helpful since it just messes up the cotton harvest and hurts color grades.  But in northern and western Texas, whatever cotton is still around in July and August might benefit from the onset of mid-summer El Niño rains.  An example was 2009.  Most of Texas’ cotton crop got off to a dry start that year, and weekly crop condition ratings were pretty lousy well into the summer.  Then late summer rains from an El Niño pattern kicked in and the resulting cotton yields were better than previously expected.    However, even in West Texas the rains can sometimes start too late to help yield and result in a sloppy harvest season (the 2004 El Niño pattern was a notable example of that).  

This season we have a lot of potential cotton acres for production uncertainty to play out.  USDA’s Prospective Plantings projected 11.1 million planted acres of all cotton (i.e., upland and Pima combined), with 6.4 million of that planted in Texas.  Around 80 percent of those Texas plantings, almost 5 million acres, is in the Rolling Plains, South Plains, and Panhandle regions.  Midsummer rains over those regions could mean anywhere from 0.5 to 1.0 million more bales coming out of Texas. Depending on what happens elsewhere in the Cotton Belt, the market implications of U.S. cotton production varying by that amount could mean cotton futures in either the upper or the lower 70-cent range. 

El Niño: As the world turns the weather changes

The El Niño question may be even more influential if it comes early enough to result in weak monsoon rains over India.  India plants a lot more cotton than the U.S., and variable rainfall there can cause swings in production on the order of 5 or 6 million bales.  Those kinds of swings can have a larger influence on prices.


Also of interest:

COTTON SPIN : 2014 cotton crop more export dependent than usual

Cotton, peanut acreage is up; corn, wheat and sorghum drop

Farmers turn to crop insurance for risk management

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