Williams recently surveyed the association’s directors, and they are penciling in a 20 percent increase in cotton acreage next year.

“It looks like our water situation will be much better next season than it was this year,” Williams said. The 2010 season started with only a 5 percent surface water delivery guarantee. It eventually reached 50 percent, but that guarantee came too late for changing spring planting decisions.

“It looks like we can start 2011 with a 15 to 20 percent water allocation,” Williams reports.

Economically cotton will benefit from that since cotton is now entrenched in the mix of crop options.

“Cotton is back economically,” Williams said.

Ernest Schroeder Jr., chief executive officer for Bakersfield, Calif., cotton merchant Jess Smith and Sons, said cotton is in a “very good situation right now.”

“There is no carry-in and supplies are tight. Textile mills are doing well, and yarn prices are up. It is a very healthy, and I believe, stable market for cotton right now.”

Schroeder does not view the current market situation as a “blip.”

“I think the 2010 crop will sell out before the 2011 crop is harvested even with more acreage next season.”

Demand is driving prices skyward. They are getting nervously high, Schroeder admits.

Adjustments downward would not be surprising this fall, but Schroeder does not expect a market freefall.

“It is going to take several years to replenish stocks because consumption is outpacing supplies,” he said.