California cotton acreage headed for new lower plateau
Apr 13, 2005 9:09 AM, By Harry Cline
California’s cotton acreage has plateaued at about 700,000 acres annually for the past three years. In another five years, there likely will be another benchmark.
Unfortunately, according to Earl Williams, president of the California Cotton Ginners and Growers Association (CCGGA), that plateau will be 500,000 acres of California cotton. At least half of that will be Pima. Extra Long Staple Pima cotton is quickly becoming the future for the valley’s cotton industry. That means SJV Acala acreage will tumble to a fourth of what it once was 20 years ago.
Last year the valley produced 670,000 bales of the total U.S. Pima crop of a record 736,000 bales. California’s average Pima yield was just 12 pounds less than the upland/Acala average. With Pima prices generally 15 to 20 cents above Acala, a federal loan rate of about 80 cents plus a strong government export incentive program, the reason Pima is the future of California’s high production cost cotton industry is obvious.
Pima may take a bigger chunk of the California cotton pie sooner than expected. It could reach well beyond 250,000 acres in 2005. Pima spot prices are currently well above $1.50 pound and Pima planting seed is sold out for 2005. However, cold, wet weather is keeping planters out of the field. Longer season Pima needs to be in the ground by April 20 for average yields. If poor weather precludes a big increase in Pima acreage, growers will switch back to Acala or upland varieties.
Williams made his predictions about the future of the California cotton acreage at a recent Cotton Technology Seminar in Carmel, Calif., sponsored by Bayer CropScience.
If Williams is correct, that would represent a 50 percent reduction from the California cotton acreage just eight years ago.
That is the bad news. The good news is total bale production has not fallen as dramatically. Total California production last season (2.4 million bales) was only 18 percent less than it was in 1994 (2.9 million bales). It will be difficult to repeat last year’s near perfect growing conditions that resulted in a record average yield of more than 1,500 pounds of lint per acre. However, there has been an upward trend in yields since 1999 and that is expected to continue, softening the blow of reduced California acreage with higher yields.
Notes challenges
The outspoken Williams detailed some of the challenges and issues continuing to face California cotton producers
While the recall of Gray Davis and the landslide election of Arnold Schwarzenegger as governor of California was popular and welcome, changes have not been as dramatic as most had hoped.
A liberal legislature maintains a status quo in Sacramento and unfavorable for agriculture. Failure to quickly reform workers compensation has been a disappointment in the Schwarzenegger administration.
"Businesses in California needs immediate assistance with workers comp," said Williams.
The biggest disappointment so far in the new governor’s term, according to Williams, was his signature on legislation sponsored by Shafter, Calif., Democrat Sen. Dean Florez making farmers liable for spray drift. It was opposed by every agricultural group in the state, yet Schwarzenegger signed it.
Dust and air pollution and water issues continue to dominate lobbying efforts in Sacramento for cotton growers as well as volatile organic pesticide compounds which face a ban because of strict air quality standards.
CCGGA focuses on state issue, deferring to the National Cotton Council do "do the heavy lifting" on the national scene where Williams said NCC is "highly respected" by agencies and legislators and does an exceptional job in representing California cotton producers in California and Beltwide.
The World Trade Organization (WTO) case Brazil brought and won against the U.S. continues to dominate the national and international agenda for NCC.
Like many in American agriculture, Williams sees little chance for WTO to benefit American agriculture with developing countries continuing to complain and win rulings against U.S. farm policy that was supposed to be WTO-complaint proof when the last fall bill was passed.
The U.S. recently lost its appeal of the anti-U.S. ruling in the case brought by Brazil. Williams said it is puzzling to see Brazil’s cotton acreage double while at the same time the nation complains that U.S. farm policy has hurt its cotton marketing efforts.
No enforcement
"If our farm program is so hurtful, I cannot image what they would do if they did not did not have the U.S. farm program," said Williams, who noted that the even though Brazil won its WTO case, the WTO has no enforcement power.
Williams continues to bristle over the role University of California, Davis economist Dr. Daniel Sumner played for the Brazilians in the case against the U.S. Sumner was hired by the Brazilians. Sumner is a former USDA official who testified against USDA farm policy on behalf of Brazil.
Williams believes Sumner should be fired over his role in the WTO dispute.
Williams offered no solution to the WTO trade dilemma. "Quite frankly, I am for fair and balanced trade, but I do not see how we can achieve that.
"All I see is the American farmer traded away and forced out of the world marketplace," he said.
"The State Department — not USDA or the trade negotiators — is running agricultural trade policy," said Williams, who cited the Australian free trade agreement as an example.
"There are 18 million people in Australia and 280 million people in the U.S. Who is going to benefit from a free trade agreement with Australia? Certainly not the U.S.," said Williams.
"We cannot continue down this road. American agriculture is too big of a piece of the pie in this country to be sold away to other countries who subsidize their own agriculture through a different mechanism than is used in this country," he said. "I cannot believe the American people will stand for that."
Farm law prospects
He admitted it will be a challenge to maintain the current farm bill when it comes up for renewal. The challenge came earlier than expected when the Bush administration recommended cutting the current farm bill spending before it expires to reduce the federal deficit.
Changing the farm program in midstream would be disruptive to American agriculture which made decisions based on the five-year program passed by Congress and signed by Bush, who now wants to change what farmers and ranchers considered a contract.
Agriculture expenditures account for 1 to 1.5 percent of the federal government budget, yet agriculture contributes 15 percent to the American economy, said Williams. The challenge is to make sure legislators and the consumer understand that, he noted.
e-mail:hcline@primediabusiness.com
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