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Specialists say...: Delta cotton crop well below normal

On July 20, at a Shelby, Miss., field day, Mississippi cotton Extension specialist Will McCarty said the next few days would be crucial in determining how the state's cotton turned out.

"Up to July 1, we had a real strong crop going, and we still do in many areas. But the last few days has really taken the starch out of some of our cotton - especially dryland. I appreciate a good breeze, but it's time for the wind to calm down. Wind has been up and it's dried the ground out and is hurting the cotton," said McCarty.

Unfortunately, the wind never quit blowing and rains never came. The Delta is reaping the effects of both.

McCarty now says the Shelby field day came during "a most sensitive period. Unfortunately, the wind stayed strong out of the north-northwest, it remained hot and it didn't rain. This is a disaster. Apparently, the Delta is about to see a cooler period that will drop temperatures to the mid-90s. But Texas is still cooking. Cotton farmers are still getting bad news. It seems to never end."

"The story is pretty obvious. We're coming off probably the hottest, driest July and August on record in Mississippi - in the last few decades, anyway.

"We had a good potential at the first of July, but that potential has evaporated. We started defoliating cotton two to three weeks before normal. We started picking cotton two weeks ahead of normal," says McCarty.

Dryland cotton yields are going to be very disappointing in most areas of Mississippi. Irrigated cotton has held up pretty well but - due to heat stress - isn't going to be what it should have been.

"The early yield reports have been very disappointing. Of course, those numbers are coming from some of the worst dryland cotton acreage. Yields on some of the burned up fields have been anywhere from half a bale to a bale. Very little is going over a bale," says McCarty.

Farmers should begin moving into some better cotton shortly. But overall, McCarty anticipates bad news.

The Aug. 1 USDA crop report had Mississippi at 1.34 million acres of cotton. The report estimated the state yield at 738 pounds.

"That could easily be 100 pounds too optimistic - or worse. Going back to 1980, I think we picked 1.12 million acres that yielded 488 pounds. 1980 seems to be the year everyone harkens back to as the closest - in terms of heat and drought - to 2000. It was very similar.

"We can irrigate more cotton now than we could in 1980. That said, I don't see us dropping to the yield levels of 1980. But the impact of the terrible weather on Mississippi cotton has been very severe," says McCarty.

What does this mean for acreage next year? "That will hinge on the crop insurance program. If the program looks decent for cotton, we'll still have acreage. My initial reaction is that acreage will probably drop. But it's hard to say in the face of soybean yields and terrible grain prices. If farmers have been involved in any type of decent, risk-management program they'll be more inclined to again plant cotton next year," says McCarty.

Gov. Musgrove has already declared Mississippi a disaster area. McCarty agrees with the governor's bleak assessment.

"While this year is tough, we still need to look forward. Everyone should be praying for a wet winter. If we don't have a wet winter the prospects for next year's crop are dire. We have no subsoil moisture - this is the second dry year in a row. Rainfall this winter is critical to recharge our soils.

"Growers need to be seriously considering reduced-till, no-till options for their farms to conserve moisture."

Are there areas of the state that are better or worse?

"Not really. The problems are pretty consistent throughout. There are little pockets that managed to pick up showers and look a little better. The south and north Delta areas are extremely dry. Right along the Tennessee line, some farms got a rain when they needed one."

Louisiana "We're picking some cotton - our weakest that has been pretty burned up. Most is dryland on the Macon Ridge area of the state. Yields on cotton being picked are very low - in the range of 250 to 300 pounds," says Louisiana cotton Extension specialist John Barnett.

"We do have some cotton that looks better than that. We're in the middle of defoliation. The biggest problem we're having currently is it's so hot and dry that anyone using more than the lowest rates is seeing leaf-stick." Farmers are also seeing problems with uptake of the defoliant, which is leaving leaves on the plants.

"We have some irrigated cotton in parishes that isn't to the stage of needing defoliation. That cotton looks to have the potential for two bales. So there are some good-looking acres."

The alluvial soils along the rivers have held up better than the ridge. That cotton looks to be one bale to one-bale-and-a-quarter, says Barnett. There's a little picking in those areas. Most are defoliating.

Does Barnett think Louisiana should be declared a disaster area?

"Certain parishes that are off more than 30 percent are disaster areas. There are some that will be off even 50 or 60 percent. Soybeans are also looking poorly - the Group Vs and Group VIs are burned up. Some of the Group IVs looked okay. The rice crop is off from what was hoped for."

What about maintaining cotton acreage for next year?

"At this point, cotton farmers have very few options. The grain markets are so depressed that cotton still looks to be the most favorable crop. I don't look for a big reduction in acreage."

Any parishes that look okay?

"Every parish is going to be off. The best cotton is in the irrigated sections of East Carroll, Tensas, and Morehouse parishes. Even in the good, alluvial soils along the Ouachita, Red and Mississippi rivers, the cotton won't be what it is in a good growing season."

Most of Louisiana's cotton is cut-out, says Barnett. There are a few late fields still out. There has been a tremendous increase in whitefly populations seen along with armyworms and loopers.

"Overall, our insect situation has been moderate this year. Our boll weevil eradication program did a very good job," says Barnett.

Arkansas Like its neighbors, Arkansas began defoliating early, says Arkansas Extension cotton specialist Bill Robertson.

"Yesterday, I looked at some plots we defoliated two weeks ago. They've already run a picker through one plot, and should have run it through the other field, too.

"The crop is hard to make definite comments about. When looking at some fields, boll numbers look all right. This year has been strange. We had a rough start, but the variability between farms and fields is incredible. I see some fields that look decent and some fields that are ragged," says Robertson.

Something that concerns Robertson is that when he compares average yield history to August temperatures, things don't stack up in farmers' favor. When August temperatures are high, yields are historically low.

"It doesn't look good since we had record-high August temperatures."

When will picking start in earnest?

"We've got a lot of fields that will come up for defoliation in the next couple of weeks. Picking will run 10 days behind that."

The last USDA report had Arkansas at 751 pounds average yield.

"I don't know if they changed from the original estimate of 930,000 planted acres. I've been saying all along that we would average around 700 pounds. I'll stick to that for now.

"Last year, Arkansas had a dry fall and farmers scrapped and ended up with an average of 715 pounds. That was because we were able to scrap a bunch of acres."

Has Arkansas been declared a disaster area? "Not yet. The governor is working on getting that wrapped up. We definitely need it."

Insects? "We're getting a number of calls on whiteflies. Honeydew is building up.

"One thing that worries me is plant activity. As incredible as it sounds, the longer we go without a huge rain, the better the plant activity and the better the harvest aides will work. We don't want a 2- or 3-inch rain. A small rain that won't affect plant activity and help with the honeydew is what we need."

Are there parts of the state that look better? The central area of the state has missed out on the rains that counties on the Missouri border have gotten, says Robertson. Farms in the Dumas/Winchester area have also gotten some rain.

"That area has some of the better cotton I've seen in the state. But around Marion, Crawfordsville, West Memphis and those areas, dryland cotton has taken it on the chin.

"I wish I had better news. I've talked to some farmers who seem very excited about their crops. I hope I'm wrong, but I think many of them are going to be disappointed when they put a picker in the field," says Robertson.

As the U.S. harvest gains momentum, growers should consider "locking in" the loan deficiency payment (LDP) on their cotton while it is still in the module or in trailers, a National Cotton Council economist says.

In recent years, most producers have waited until their cotton was ginned - and prices have generally moved lower - before requesting an LDP or placing their cotton in the marketing loan. But, that may not be a good strategy in 2000, according to the NCC's Mark Lange.

Speaking at a meeting of the American Cotton Producers in Raleigh, N.C., Lange noted that if cotton prices should continue to rise on reports of drought and heat damage, the increase could have a downside for U.S. cotton growers.

"You need to keep in mind that a Cotton Outlook A Index of 66 cents per pound essentially eliminates any LDP payment," said Lange, NCC director of economic services. (With the A Index at 66 cents, the adjusted world price will be above the CCC loan rate of 51.92 cents, thus ending any marketing loan gains for U.S. producers.)

At the time Lange spoke in Raleigh, the A index was at 61 cents a pound. Since then, world cotton prices have been strengthening because of concerns about the effects of drought and high temperatures on the U.S. crop.

"It looks like we are going to go through some ratcheting up of world prices over the course of this harvest period," he said. "It could well be that you need to remind yourself and your ginner that when cotton goes into the module, you can lock-in your LDP on that cotton.

"We might be in a situation where the A Index is rising during this harvest, and it might be to your advantage to secure the LDP rate while the cotton is in the module. Your county FSA office has forms that you need to fill out to take care of this."

Lange said USDA has issued new guidelines on a situation that could have caused problems for producers who hit the $75,000 payment limitation after requesting LDPs on cotton in modules.

The guidelines say that farmers who reach the $75,000 limitation on marketing loan gains - and thus would have to forfeit part of the payment - can still place that cotton in the CCC loan and redeem it with marketing certificates. Before the new guidance, requesting an LDP on module cotton was an irreversible decision.

"The producer must still have beneficial interest in the cotton and make application within the loan availability period," said Lange. "But he can put the cotton in the loan if he exceeds the $75,000 limit after he has requested the LDP."

Lange noted that although New York cotton futures have been trading at a level that is considerably higher than last year at harvest, the increase won't completely offset the potential loss in loan deficiency payments.

"Thus, the net cash value on a per-pound basis is likely to be lower than it was last year," he noted. "Hopefully, for some of you, there will be a few more pounds available than last year, but they are likely to be sold for a lower net price."

While speculators appear to be focusing on weather conditions in the United States, some good things have been happening for cotton on the world market.

In its August forecast, USDA said that the world carryover stocks declined by 4 million bales to 40.1 million bales at the end of the 1999/2000 marketing year July 31. It projects that world mill use will rebound by more than 4 million bales to 91.2 million for the year.

"That 91-million-bale number makes me nervous," said Lange, "because it includes nearly 21 million bales of mill use by the Chinese. I think the Chinese are using a lot of cotton, but I'm not sure they're using enough to push this up over 91 million bales. But, it is up significantly from where we were before."

For the 2000/01 marketing year, USDA is forecasting that world mill use will increase to 92.2 million bales and that world cotton stocks will decline nearly 5 million bales to 35.2 million. That would put stocks down by more than 9 million bales in two years.

"We are already seeing a tremendous reduction in world stocks," says Lange. "We all know what tightening of the world stocks-to-use ratio means to prices, and we are tightening it both ways. We're pulling down stocks and we're seeing increases in demand."

The other important development is that China is doing the stock reduction, he noted. "Those of you who read newsletters know that most of the U.S. merchant community believes there will be significant sales of cotton to China sometime in the new crop year."

China, in fact, is quoting new crop cotton for export, and most merchants believe that the People's Republic could sell 500,000 to 700,000 bales of that cotton in this crop year. "But, they also think that this kind of stock reduction means there will be purchases by the joint venture mills in China certainly by next spring.

"I would caution, however, that none of these merchants have sales on the books," he said. "They are selling some pima to China, but there are no significant sales of upland cotton."

Lange said he also has qualms about USDA's prediction of 92.2 million bales for 2000/01. "It may not be quite that good because that includes 22 million bales of prospective mill use in China, and I'm not sure they're going to spin that much.

"They are consuming a lot more cotton than they were two years ago," he noted. "That's because of the big policy change in which they lowered the price that the Chinese textile mills pay for Chinese cotton. It has been a tremendous stimulus to the mill use of cotton in China."

Farmers are becoming more techno-savvy with almost one-fourth of all farmers relying on computers to conduct farm business, according to a USDA study.

In the Mid-South, the percentage of farmers using computers is slightly lower than the national average. But, like their counterparts in other parts of the country, the Delta has seen the number of farms with Internet access more than double since 1997.

Arkansas leads the Mid-South in computer usage with 41 percent of farmers with access to computers, 23 percent using computers for farm business and 25 percent with Internet access.

The numbers are similar in Louisiana, where 35 percent of farmers have access to computers, 20 percent are using the technology to conduct business and 21 percent have access to the Internet.

Mississippi farmers are falling behind their Mid-South neighbors when it comes to computer use. According to USDA's National Agricultural Statistics Service, 30 percent of the state's farmers had access to a computer in 1999 and an estimated 18 percent are online. The percentage of Mississippi's 42,000 farms conducting business on computers is even lower, with a USDA statewide estimate of 9 percent in 1997 and 11 percent in 1999.

Nationally, the percentage of farms with Internet access more than doubled to 29 percent in the two years between 1997 and 1999, according to USDA's National Agricultural Statistics Service. More than 600,000 U.S. farms and ranches accessed the Internet in 1999, with 15 percent of those conducting e-commerce transactions, based on USDA's Agricultural Resource Management Study.

The typical farmer participating in e-commerce, the study found, is between the ages of 35 and 54, has attended college, and lives in either the Midwest or the Fruitful Rim region.

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