U.S. cotton producers intend to plant 9.1 million acres this spring, a 6.2% increase from year-ago, according to the National Cotton Council's (NCC) 35th Annual Early Season Planting Intentions Survey. Upland cotton intentions are 8.9 million acres, up 5.7% from 2015, while extra-long staple (ELS) intentions of 208,000 acres represent a 31.2% increase.
"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," said Dr. Jody Campiche, NCC's vice president Economics and Policy Analysis. "History has shown that U.S. farmers respond to relative prices when making planting decisions. During the survey period, the cotton December futures contract averaged just under 65 cents per pound, which is very similar to year-ago levels. However, corn and soybean prices are 8% to 12% below year-ago levels, so price ratios of cotton to competing crops are a bit more favorable than in 2015."
Campiche said using a harvested acreage total of 8.1 million and a yield of 831 lbs. per acre generates a cotton crop of 14.0 million bales, with 13.4 million upland bales and 595,000 ELS bales. USDA currently projects the 2015 crop at 12.94 million bales on a yield of 769 lbs. per acre.
The survey responses indicate the increase in cotton acreage is largely the result of weaker prices of competing crops and improved expectations for water and favorable planting-time weather. "Comments from respondents underscored the very difficult financial conditions facing cotton producers. For the past two years, U.S. cotton producers have struggled with low cotton prices and high production costs – and with current futures markets indicating steady prices, producers' economic situation is not likely to improve in 2016," states the NCC. "Some producers, in fact, will find it very difficult to obtain production financing for the current year.""