Volatile market likely to impact 2013 cotton acreage

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Wild shifts in cotton prices over the past few years are expected to impact the amount of acres farmers will plant to the crop in 2013. Farmers appear to be showing weariness over taking the risk with cotton as they watch other grain prices increase. As a result, farmers are expected to plant one of the smallest cotton crops in two decades, according to a Thomson Reuters poll. An informal survey of farmers at the Beltwide Cotton conference earlier this month showed that they are expecting to plant 10.36 million acres of cotton, which is a decrease of 16 percent from 2012.

The double-digit decrease will make the 2013 crop the third lowest since 1987, following 2008 and 2009, according to USDA archives.

Although it is not uncommon for farmers’ cotton acres to fluctuate as they look to plant the most profitable crops each season, this large of a drop is concerning. It is speculated that farmers are still “disenchanted” with cotton prices after several years of dramatic price swings, said Sharon Johnson, cotton specialist at Knight Capital.

The drought in 2012 spurred higher prices for corn and soybeans and the temptation to capture their value may be too irresistible to cotton growers. Wheat and soybeans were the best-performing commodities in 2012, while cotton prices were the third weakest.

As the drought clings to more than 60 percent of the United States, planting decisions will be impacted for the 2013 season. Weather will play a large role in helping farmers determine if they will plant more corn or soybeans this year. Rain in the Southwest could be one of the largest determiners of cotton acreage. If rainfall in the Southwest increases, cotton acres could drop to 9 million, which would set a 20-year low based on USDA records.


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