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High Plains cotton acreage less affected by grain prices

High grain prices are likely to affect 2007 Texas cotton acreage only slightly, no more than a 500,000-acre reduction. High Plains acreage will change little with planting decisions based more on water availability than the price of alternative crops.

“We’ve had some good amounts of moisture, snow and rainfall, so far in the Northern part of the High Plains,” says Shawn Wade, director of communications for Plains Cotton Growers, which represents cotton growers in 41 Texas High Plains counties.

“If we get more moisture there and start picking up more south of Lubbock then maintain that pattern through the winter, we’ll be set up for a good start,” Wade said in an interview at the recent Beltwide Cotton Conferences in New Orleans.

“We don’t think acreage will be down as much as in other parts of the Cotton Belt. Some areas are predicting a 10 percent to 20 percent reduction as cotton acreage goes to corn. High Plains planting decisions are more a factor of water. Even with good prices, many areas don’t have enough water for corn. We may see some cotton go to corn in the Amarillo area but we don’t foresee a wholesale change.”

Wade predicts a 3.5 million acre crop for the PCG area. “We usually plant 3.7 million acres. Statewide, predictions call for a 500,000-acre switch from cotton to grain.”

Wade said cotton farmers face a handful of challenges as they prepare for the 2007 crop. Production costs will be high again. “We don’t have anything new but energy costs will remain high. Farmers just have to deal with those input costs,” Wade said. “The good news is that technical fees will be stable. Monsanto will keep rates the same.”

Wade said maintaining a cap on those fees will help farmers who have found Flex and stacked gene cotton varieties to be “good performers in the area.

“Marketing always poses challenges,” he said. “If things continue to go the way they are cotton farmers will need to take advantage of any upward movement. Good prospects in late summer could affect markets.”

Consider options

Wade said farmers should consider options contracts or other marketing strategies to protect counter cyclical payments. “That 13 cents can disappear in a hurry with any upward price movement,” he said. The direct payment is set, but the counter cyclical is tied to price. As base price moves above 52 cents a pound, the CC payment begins to diminish.

“Cotton farmers face all the normal challenges of putting in a crop,” Wade said. “But we remain optimistic. We also see a few more new varieties available. And some good drought relief programs are available from seed companies.”

Wade said the 2006 High Plains cotton crop surprised many observers. “It was a lot better than many expected. Most who looked at the crop in August anticipated a 3.25 million to 3.5-million-bale harvest. Many were skeptical of the USDA 3.8-million-bale projection. We’ll make better than 4 million bales from the area.”

Wade said irrigated cotton performed well. “The story on dryland cotton was written early. Most was zeroed out. Almost one million acres did not emerge. We lost 2.2 million acres across the state, from 1.2 million to 1.4 million in the High Plains.”

He said the 2006 crop was an expensive one to make, especially for irrigation. “We didn’t have much in-season rain, just a few spotty showers. If we put water on with rainfall we do better.”

Wade said quality of the 2006 crop will be good, especially with staple. “An average of one-and one-eighth inch and 36 staple is the highest on record.”

He said the crop has a “fair amount of low micronaire cotton but with more balance than in previous years. We have some good mike cotton, too.”

Late harvest had some bark problems, primarily weather related. “We were averaging 12 percent bark before Christmas,” Wade said. “After the first snow cotton in the field got hurt some and as it went into the gin and classing office bark content went up to 40 percent. Year to date, bark content remains less than 20 percent.”

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