Upland cotton intentions are 12.8 million acres, up 3.8 percent from 2017, while extra-long staple (ELS) intentions of 254,000 acres represent a 1.0 percent increase.

Dr. Jody Campiche, the NCC’s vice president, Economics & Policy Analysis, said, “Planted acreage is just one of the factors that will determine supplies of cotton and cottonseed. Ultimately, weather, insect pressures and agronomic conditions play a significant role in determining crop size.”

Cotton Belt

She said that with abandonment assumed at approximately 15 percent for the United States, Cotton Belt harvested area totals 11.1 million acres. Using an average U.S. yield per harvested acre of 842 pounds generates a cotton crop of 19.4 million bales, with 18.7 million upland bales and 744,000 ELS bales.

Campiche noted, “History has shown that U.S. farmers respond to relative prices when making planting decisions. During the survey period, cotton futures prices were stronger relative to competing crops. The price ratios of cotton to corn and soybeans are more favorable than in 2017. However, soybeans are expected to provide competition for available acres in 2018, due in part to the lower production costs relative to cotton. While cotton prices have improved relative to other crops, cottonseed prices are at the lowest level since the 2006 marketing year, thus increasing the net costs of ginning.”

Many producers will continue to face difficult economic conditions in 2018. Production costs remain high, and unless producers have good yields, current prices may not be enough to cover all production expenses.

The NCC noted 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.

Source: NCC, February 2018

Extract from Bremen Cotton Report 07-08 2018.