The cotton belt has experienced one of it’s driest winters in quite some time, according to data from the drought monitor.
Cotton acres impacted by drought are tracked dating back to 2000, when census and satellite data provided by USDA were combined with meteorological data from the National Drought Mitigation Center’s weekly reports. The most recent drought monitor shows cotton acres in any level of drought (D1-D4) at 88%, the second highest all time, only behind the 89% set prior to this week. The historically dry conditions have been lingering for some time, with 9 out of the 10 weeks with the most acres classified in D1-D4 occurring since January of this year. The next highest rating in the month of March occurred back in 2011, when 71% of acres were impacted.
While the low soil moisture is undoubtedly a concern, especially as planting season in the deep south will soon be underway, it is not necessarily time to panic yet. The most intense drought category, D4, still shows no cotton acres in that classification. Drought years that cause major yield decreases are prone to seeing more intense forms of drought rather than abnormal dryness. As most cotton farmers know, the crop can be surprisingly tolerant of mild drought, outperforming expectations even when corn and soybeans begin to show signs of stress. A key timeline to watch for D4 drought development will be in the month of May. Recent drought years that have had pronounced impacts on cotton have seen the D4 category begin to pick up around that timeframe and persist through mid-summer.
Meteorologists are also eyeing the potential for a quicker than expected shift to an El Niño weather pattern that could exacerbate drought conditions in both the Mississippi Delta and southern Plains, where dryland cotton is particularly susceptible to production losses from drought. While weather scares and potentially lower production are not normally exciting for farmers, a potentially lower yielding U.S. cotton crop in combination with expectations of lower planted acreage would offer support in easing the balance sheet through lower supply, in turn spurring some much needed buying interest in cotton futures.