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Guest Editorial: Tommy Horton. Volatility May Be Theme Of 2013 Cotton Crop

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Guest editorials are a new feature at Sourcing Journal. We hope they bring you valuable information and an interesting reading experience. If you are interested in writing a guest editorial, or if you wish to contact the author, please email us.

Tommy Horton is the editor of Cotton Farming Magazine. He has edited the magazine for 14 years, and he also worked in the communications department of the National Cotton Council for 13 years. Before getting into cotton, Tommy worked as a journalist in Memphis, Mississippi, and North Carolina. He comes to Sourcing Journal to share his expertise about the 2013 cotton season.

This could be one of those unpredictable seasons for the U.S. cotton crop, and as planting season approaches it’s hard to know if any important questions will be answered quickly.

For example, how much of a cotton acreage reduction will actually occur across the Belt?  We know that reductions are forecast in each region, but nobody seems to know for sure how large those reductions will be.

At the recent National Cotton Council Annual Meeting in Memphis, the organization issued its Planting Intentions Report for 2013. Not surprisingly, the total projected planted acreage for 2013 dropped to 9.01 million acres, including extra-long staple and upland cotton.

Most cotton observers had expected the acreage reduction, but it was still a jolt to everyone’s system when the numbers flashed on a huge screen in front of a big audience. Of all the numbers I heard in that report, the most  shocking was the reduction for the Mid-South, which was a nearly 50% drop from 2012.

Farmers are following the market and trying to take advantage of high soybean, corn and wheat prices. Those same farmers also say that they aren’t abandoning cotton completely.  They continue to say that they’ll increase cotton acres when prices improve.

As one of my consultant friends in Louisiana often tells me, “cotton has been declared dead five times in my lifetime, and it always comes back.” I put a lot of faith in that comment. However, I also believe that each region of the Belt is distinctly different in how it grows cotton. Some areas stick with cotton because farmers say they have too much invested in infrastructure. They aren’t ready to make big acreage shifts and are content to stay with cotton.  Meanwhile, farmers in other regions are more flexible in their crop mixes each year and don’t mind making big changes while maintaining cotton in a rotation system.

Prices also give me encouragement about cotton’s future as we head into the 2013 crop season.  The current prices are inching into the mid 80-cent range. If those price trends continue for the next month, they could have an immediate impact on planted acreage for cotton in 2013 – that’s how volatile the market can be.

The good news for U.S. cotton is that average yields continue to increase, which comes close to making up for the lost acres. And, even though the threat of drought hovers over Texas this year, the state could deliver a bigger crop than last year if it can catch some timely rains in the next 30 to 60 days.

And what about U.S. cotton quality?  Our reputation for delivering the most consistent high quality cotton to export markets has never been better. Yes, these are difficult times. China continues to sit on huge reserves. U.S. farmers need a five-year Farm Bill sometime before September. Corn, soybean and wheat prices continue to impact cotton acreage. The Brazilian/WTO issue needs to be resolved. Cotton needs to maintain its infrastructure. The list goes on and on.

Somehow, the industry will persevere and survive.  It always does. You can take that prediction to the bank.

 

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