High Prices Have U.S. Farmers Planting More Cotton
BAKERSFIELD, Calif. (AP) – More American farmers are expected to plant cotton this year as prices remain high thanks to demand from the growing middle class in China and India and a short supply worldwide.
Some of the biggest growth is expected in California, where planting had slipped to a low of 200,000 acres two years ago from 1.6 million acres in 1979. This year, California farmers are expected to plant 400,000 acres, said Mark Bagby, spokesman for Calcot, a marketing cooperative that represents 1,400 growers in California, Texas and New Mexico.
Nearly all of that will be Pima cotton, the high-quality, extra-long fiber used in luxury sheets and towels. The commodity futures for cotton rose to historic highs in August, hitting $1.50 per pound, triple the price in 2008. Long-term cotton futures now hover around $1, but Pima prices are closer to $1.30.
“Those are kind of unheard of prices, and people are saying they could be conservative,” said Jim Crettol, a third-generation farmer who expanded his Pima cotton crop 60 percent to 600 acres.
Crettol said he might have planted more if he hadn’t converted much of his 1,800 acres in Wasco to grow grapes, almonds and tomatoes to balance cotton’s long decline in California. The state offers near-perfect conditions for growing cotton, with its long, dry, March-to-October growing season. But until recently, the crop wasn’t worth much.
Although prices have climbed, consumers probably won’t notice much difference, said Daniel Sumner, a professor at the University of California at Davis.
“Consumers will see a modest increase in prices when they buy a shirt or sheets. But it won’t be a big change, because most of the cost is in processing and marketing, Sumner said.
A short supply and stronger demand globally have driven the cotton resurgence. Worldwide cotton production in 2009 was the smallest since 2003, just as demand for cotton goods was picking up and the world economy was coming out of the recession. Massive flooding last summer disrupted Pakistan’s cotton harvest, as did cold weather in China, contributing to extremely low world cotton reserves.
American farmers have jumped into the gap. Total U.S. cotton production hit 18.3 million bales last year, a 50 percent increase over the year before, experts say.
Texas, the nation’s biggest cotton grower, is expected to expand production 10 percent to 6 million acres this year. But unlike California’s irrigated crop, most Texas cotton is planted in dry land in the western part of the state and needs adequate rain.
West Texas has been “real slim on moisture” so far this winter, said Rickey Bearden, who farms 9,000 acres of cotton near Plains, Texas.
“But cotton growers across the country are excited about the high prices for cotton and the chance to have a profitable year,” said Bearden, the recently-elected chairman of Cotton Inc., a research and promotion group.
In Tennessee and other southeast states, commodity prices for corn and soybeans are also high, so many farmers have the luxury of waiting until March to decide what to plant based on current pricing, said Gary Adams, chief economist for the National Cotton Council.
More production offers a much-needed boost for the entire cotton industry.
Mike Tomasetti’s fleet of nine John Deere, six-row cotton pickers have stood silent for two years. While many farmers and other harvesters sold their specialized cotton equipment, Tomasetti held on.
“I’m a gambler, but if it comes back I’m going to be in the driver’s seat,” was Tomasetti’s thought when cotton was in the doldrums.
Now his 25-year-old business in Kerman is back to full speed with contracts already lined up to harvest 7,500 acres of Pima cotton on five ranches. He expects to take on another 2,500 acres before the harvest begins in October.
“They all called within the last 30 to 45 days and wanted to make a deal,” Tomasetti said.
In Firebaugh, the Thomason Tractor Co. has sold five new John Deere cotton pickers after selling none for three years, said General Manager Steve Malanca, who noted that three harvesters were parked in the Thomason yard for repair.
And at Kern Tractor Supply in McFarland, orders for parts to plant and harvest cotton increased 5 percent to 10 percent, General Manager Chuck Hice said.
Last year, farmers sold used John Deere cotton pickers to scrap iron yards for as little as $1,400. One of the same models was listed on eBay last week for $6,000.
“That’s how bad the market fell out,” Hice said.
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