Cropland continues to decline in the Delta, with cotton, rice and other crops traditionally associated with the south being impacted hard as farmers increasingly turn to corn and soybeans.
U.S. planted rice acres hit their lowest level since 1972 according to the June Acreage report released last week. That mark was largely driven by America’s primary rice growing states in the Delta (Arkansas, Louisiana, Mississippi) seeing their smallest acreage since 1976. Principal cropland, which sums acreage totals for 22 different crops, has declined from 17.36 million acres in the Delta when the statistic was introduced in 1993 to 13.815 million acres this year.
Even with the loss of total cropland taken in to consideration, rice and cotton have fallen sharply. In 1993, rice made up 12% of all planted acreage in the Delta, and peaked in 2010 at 17%. Current acreage shows rice near record-lows as a percentage of total acres at 9.4%. Cotton has also suffered over that time, despite the mild bump in acreage from last year at the U.S. level. The natural fiber made up nearly one-fifth, or 18.5% of acres in the region in 1993, whereas that figure now stands at 7.3%. The loss in rice and cotton acres can be seen alongside the increase in corn and soybeans over the same time, with corn and soybeans combined netting a record 60.3% of acres this year.
What’s driving the shift?
The USDA-ERS estimates value of production less operating costs is greater in both corn and soybeans compared to rice and cotton. Cotton saw a return of $188 per acre on average compared to $342 in corn last year, and the disparity widens further when factoring in opportunity cost and other factors that show up from an economic but not an accounting viewpoint.
Not only do specialty crop producers have additional costs (more chemical applications in cotton, commercial drying and irrigation expenses in rice), they have been faced with multiple years of poor prices. The average cash price for rice hit an 8-year low last marketing year at $12.10 per hundredweight, and cotton set a 6-year low at 59.5 cents per pounds. Those low prices have been one cause of the chronically higher payments per acre needed to support farmers in times of economic distress, though those payments have not been particularly effective in helping acres stay in production as noted by Ohio State University ag economist Carl Zulauf in a recent farmdoc daily paper.
That combination of high costs, poor revenues, and an unsteady outlook in demand have caused southern farmers to turn to corn and soybeans even more. While the immediate switch does lift cash flows, longer-term problems still exist. The row crop sector is already dealing with relatively bloated balance sheets in grains and oilseeds, and these acres are likely to continue to increase as farmers outside of the Midwest find few other alternatives available.