What is in this article?:
- Cotton economic outlook good near term, maybe longer
- Big 4 production
- California estimate: 440,000 acres
- China remains as cotton enigma
- Drier weather conducive to more cotton
- The U.S. cotton price bubble is not likely to rupture soon.
- The world cotton market is in uncharted territory in a cotton market and world economy that is far from traditional.
- There will be more cotton produced and consumed in the world in 2011-2012. However, production may not be as robust as prices would indicate.
- “We had a grower meeting in Imperial Valley and 25 growers showed up. They wanted to get back into cotton, but no one has pickers.
Drier weather conducive to more cotton
“The drier it is, the more cotton that is planted,” said Robinson, citing Texas as an example. “If you think like a Texan, dry conditions induce more cotton planting. You plant cotton and insure it when it is dry.”
Robinson said similar drought conditions have prevailed in Louisiana eastward through Alabama. Robinson said growers there could start thinking like Texans. “They have already experienced drought and with the aflatoxin in corn, they may start thinking like Texans.”
For growers who have been growing corn back to back for several years, cotton prices could entice them to switch back to cotton for rotation purposes. “Growers in Arkansas and Mississippi know full well you can get a 10 percent yield boost from corn to cotton and that will influence growers in certain places.”
Glyphosate resistance could play into a rotation decision, he said. Herbicide resistance in soybeans could steer growers to wheat.
Robinson said grain elevators are being aggressive in their contracting to persuade growers to stay with alternative crops. “If a grower is making payments on a combine and on-farm storage equipment, that might be an incentive to maintain grain crops.”
In the Mid-South comparable prices for corn, soybeans and cotton are currently close, and they can change day by day.
Lenders will also play a role in 2011 cropping decisions in places like Louisiana. “With the hurricane and other problems, they have had a bad season over the past three or four years,” said Robinson. Lenders could very well tell growers to stick with less risky crops than cotton to make some money and reduce debt.
Textiles are tied directly to local and world economies, and Barr said recession recovery is under way. However, the engine that is driving recovery will be China and other Asian countries.
America and European nations will recover more slowly.
Barr said it will take longer for the U.S. to recover from the last recession than it did in the recession of the 1980s. It took five years then to lower U.S. unemployment from 10 percent to 6 percent with a growth rate of 4.5 percent annually. The growth rate out of this recession will be only 2 percent to 3 percent.