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Cotton prices up as low acres predicted
MISSISSIPPI STATE – It took only about 10 days to plant 40 percent of the state’s cotton crop this year, but farmers are only planting about a fourth of what they planted just three years ago.
“Forty percent of a 300,000-acre crop is quicker to plant than 40 percent of a 1.2 million-acre crop,” said Darrin Dodds, cotton specialist with Mississippi State University’s Extension Service.
Soil conditions were ideal, and producers worked quickly before rains rolled across the state the first weekend of May.
“We were making fantastic progress planting once it dried out enough after the April rains,” Dodds said. “The first cotton I heard planted went in the ground April 22.”
Dodds said if good weather holds, producers may decide to plant more cotton acreage than currently estimated.
Cotton is generally planted in Mississippi from mid-April to mid-May. Until the weekend rains prevented cotton from being planted the first week of May, the state was right on track with the five-year average of percent planted.
Dodds said the cotton-growing areas of the state got between 2 and 5 inches of rain the weekend of May 1, and parts of the state got as much as 4 more inches days later.
“Some areas that got a lot of rain have water standing on those fields,” Dodds said. “There is some potential for replant. You have to wait and see what comes up after the water drains off.”
While producers are waiting to get back into the fields, they have time to look at improved cotton prices.
John Michael Riley, Extension agricultural economist, said prices have rebounded from the recent low of 39 cents a pound in November to about 60 cents a pound for harvest futures contracts.
“Last year at this time, we were excited because planting acres looked like they might finally start coming in line with demand, plus we were experiencing extremely high prices for all crops,” Riley said. “Then the bottom fell out, and we have been in this glut since then.
“The silver lining is that we’re reducing planting acreage even more, and that is helping out prices. Still, the biggest impact that we’re seeing is some strength in the economy, which is leading to some strength in demand,” Riley said.
He said these prices are close to break-even prices for producers, which means that cotton farmers should not lose money producing a crop this year.
Riley said cotton prices began to increase March 9 when the Dow Jones Industrial Average began its rise. Cotton has increased 18 percent in price from March to the end of April.
“That definitely might have changed some producers’ minds when they were looking at what seed to put in the ground,” Riley said. “We won’t know actual, national cotton acres until mid-June, so until then, weather and the general economy will drive the cotton market.”