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Forecasts Call for Fewer Cotton Acres and Lower Production in 2015

By John Johnson

Attention is turning to the 2015 crop year, and by all accounts, U.S. farmers will plant fewer cotton acres and produce fewer bales than in 2014 due to prevailing low cotton prices. China and India also will produce less cotton this year; however, world stocks will remain burdensome and keep a lid on cotton prices, according to most analysts.

Cotton Grower magazine released the results of its survey in early January which projected U.S. planted area at 9.72 million acres, down 11.7 percent from 2014. Texas farmers will plant 5.43 million acres, down 12.4 percent, Oklahoma will plant 212,000 acres, down 7.8 percent, and Kansas farmers intend to plant 50,000 acres, up 66.7 percent. The Kansas estimate is remarkably different from the National Cotton Council (NCC) projection.

The magazine also forecast cotton acreage in the Southeast at 2.40 million, down 9.8 percent from last year. The Mid-South was pegged at 1.26 million acres, down 13.1 percent, and Far West producers are expected to plant 362,000 acres, down 13.0 percent.

NCC released the results of its 32nd Annual Planting Intentions survey on Feb. 6 during the organization’s annual meeting in Memphis. The NCC questionnaire was mailed in mid-December 2014 to producers in the 17-state U.S. Cotton Belt. It asked the producers for the number of acres they devoted to cotton and other crops in 2014 and the acres they plan to plant in 2015. The survey responses were collected through mid-January.

Based on the responses, NCC said U.S. producers will plant 9.43 million acres of cotton this year, down 14.6 percent from 2014. Using an average abandonment rate of 12.8 percent would result in harvested area of 8.20 million acres, and calculating each state’s average yields would result in a U.S. crop forecast of 14.0 million bales, according to NCC.

“Planted acreage is just one of the factors that will determine supplies of cotton and cottonseed,” said Dr. Gary Adams, NCC’s Vice President of Economics and Policy Analysis. “Ultimately, weather, insect pressures and agronomic conditions play a significant role in determining crop size,” he added. Adams was promoted to NCC President during the annual meeting to replace the retiring Mark Lange.

“History has shown that U.S. farmers respond to relative prices when making planting decisions,” Adams continued. “Cotton growers are approaching the 2015 planting season with harvest time futures contracts at the lowest level since planting of the 2009 crop. After more than five years of stronger markets, cotton prices fell sharply during the second half of 2014.”

The NCC survey indicated Texas farmers will plant 5.34 million cotton acres in 2015, down 13.8 percent, and Oklahoma farmers are expected to plant 225,000 acres, down 6.2 percent. In marked contrast to Cotton Grower magazine’s estimate, NCC projects Kansas cotton acreage will fall 15.0 percent to 26,000 acres. Southeast acreage was pegged at 2.39 million, down 10.6 percent, the Mid-South at 1.08 million acres, down 25.9 percent, and Far West cotton acreage is expected to fall 46.6 percent to 134,000.

Another set of projections was released on Feb. 20 at USDA’s 91st Agricultural Outlook Forum in Washington, DC. Robert Johansson, the department’s acting chief economist, estimated U.S. cotton area in 2015 will be 9.7 million acres, down 12.1 percent from last year. Although USDA’s planting estimate was higher than NCC’s, it used a slightly different abandonment rate and average yield resulting in a projected U.S. crop of 14 million bales this year, the same as NCC. U.S. mill consumption was projected at 3.75 million bales, and exports were pegged at 10.2 million.

USDA also said world consumption will exceed production for the first time in six years; however, global ending stocks will remain high. Consequently, Johansson projected cotton prices in the 2015-16 marketing year at 60.00 cents per pound.

China’s cotton production is expected to decline to 28.0 million bales as farmers there respond to new government support policies. The department estimated Chinese mills will consume 37.5 million bales, and imports will fall to 7.0 million bales. India will remain the world’s largest cotton producer in 2015 for the second consecutive year with a crop of 30.0 million bales, down only 500,000 from 2014.

Like USDA, the International Cotton Advisory Committee (ICAC) also expects world consumption to outpace production in the 2015-16 marketing year. The committee projected world cotton area and production each to be down 6.0 percent this coming season. Based on a moderate improvement in global economic growth of 3.5 percent as forecast by the International Monetary Fund, ICAC projected world consumption to grow by 2.0 percent.