- Wetter than normal winter increases irrigation water outlook.
- Strong commodity prices bode well for farmers this season.
This is a winter to remember.
It’s far wetter than normal. The Sierra Nevada snowpack is 200 percent of normal. It has been too many years since California farmers and ranchers have experienced a good winter like this one.
Wet winters, however, are a mixed blessing for farmers. It has been too wet to get all the winter cereal grains planted. Not all harvested 2010 cotton fields have been plowed down or furrowed out for the 2011 crop. Citrus growers have suffered crop and market losses because it has been too wet to harvest, and the wet conditions have damaged fruit.
On balance, however, wet is much better than dry. California growers will have an abundance of irrigation water this year, provided some judge doesn’t decide to protect fish rather than give the water to people. That seems less likely than it has in recent years.
All this is setting up the 2011 growing season as one where farmers can get economically healthy again. Commodity prices have never been higher. Most of California’s specialty crops also did quite well financially in 2010, and there is no reason that will not continue in 2011.
It is admittedly still early; however, right now growers are pleased with their 2011 prospects with reports like:
• $1.60 per pound contract prices for 2011 Pima cotton; some growers are holding out for $3 2011 Pima. Current Pima spot prices are 2.35 per pound. Many growers pocketed $2 Pima prices in 2010.
• December 2011 upland futures are at more than $1 per pound. If it is too wet to get Pima in, upland is a very attractive cotton alternative.
• The California cotton acreage guessing game is all over the board. We’ve heard one reliable estimate of 500,000 acres, up 200,000 from last season.
• Equipment dealers are reporting brisk cultivator parts sales in anticipation of significantly more cotton acreage.
• Although Arizona’s water supply situation is not a quite as bright as California’s, growers are looking at sharply increasing acreage. There are even plans to restart a Pima roller gin in central Arizona.
• This anticipated cotton revival is being tempered by 2011 wheat prices at $320 per ton, and that could steer farmers away from record high-priced cotton.
• Although no contract has been offered yet for processing tomatoes, projected contract acreages are not expected to be much less than 2010. Prices should not fall out of bed. Prices have become relative to the tonnage growers can now produce. Yields continue to skyrocket with drip irrigation. With water available once again for the West Side of the San Joaquin, processors can count on a big acreage return for more efficient harvesting.
• Corn prices reached a 30-month high recently and that offers another attractive alternative.
• Unfortunately, the dairy industry is still floundering and with high commodity prices, feed costs will not go down. This may take more alfalfa hay out, replaced by cotton, tomatoes or even wheat. It could bolster prices for remaining alfalfa.
• It has not only been wet, but it has been cold, giving orchards plenty of chilling hours to set a good 2011 crop.
This optimism could go out the window if the wet weather prevents growers from timely planting or causes early season diseases in tree and vine crops.
For right now, though, there is a lot of optimism for 2011.