Texas cotton crop outlook uncertain

Texas cotton growers whose crops held on through recent weather could find strong prices during a summer of uncertainty, according to a Texas A&M AgriLife Extension Service expert.

John Robinson, Ph.D., AgriLife Extension cotton economist, Bryan-College Station, said the 2023 cotton season will be the most uncertain he has ever analyzed. This uncertainty will likely make prices volatile until the market has a good estimate of how many cotton bales will be produced.

The uncertainty stems from the Jekyll and Hyde weather across Texas – the nation’s top cotton-producing state – that has left early U.S. Department of Agriculture planting estimates in shambles, Robinson said.

Texas had been mired in drought, and producers were not hopeful entering the warm-season crop planting period, which started in South Texas in February and March and ends in mid-June in the Panhandle.

Producers became more optimistic after cotton was planted in South Texas, spring rains benefited the young crop and forecasts turned away from a La Niña pattern. But widespread rains that started around May 1 and consistently fell over the next month prevented many producers from the South Plains to Panhandle from planting cotton fields.

Fields that caught rainfall after producers planted seeds into dry soil delivered a mixed bag of results. Some stands emerged well while some young plants were drowned out by standing water and excess moisture levels in the soil, and some never emerged as the topsoil crusted over in the sun and heat following rains. 

Those issues were followed by severe storms that delivered flooding and widespread hail that damaged thousands of additional acres. One county in the Panhandle reported more than 5,000 acres of emerged cotton lost to hail.

Robinson said half to three-quarters of intended cotton acres in the Panhandle may not be harvested as cotton. Recent high temperatures have put cotton yields in South Texas in question. Temperatures in the upper 90s and exceeding 100 degrees arrived at a delicate time for cotton boll development. There were reports that plants were aborting bolls to survive, which could dramatically change the region’s yield potential.  

“The weather has been strange, and how to aggregate the multiple factors that have created so many wrinkles of uncertainty is beyond me,” he said. “Last year, it was drought, and we had a pretty good idea it was going to be bad, and the market could digest that information, but this is the most uncertain season I can remember.”

The USDA estimated U.S. cotton acres to produce 16.5 million bales, based on prospective planting surveys earlier this year. Robinson said those surveys typically put the cotton estimate in the ballpark of what the overall crop result will eventually be.

Texas has around 55% of the national cotton production acres and produces half the U.S. crop in a good year and one-third in a bad year. In a normal year, Robinson said the upcoming June 30 acreage report by the USDA would adjust the prospective planting report up or down based on new information. But this year, the picture in Texas is wildly unknown. 

“It’s always challenging to forecast production at the state level because Texas is so big, but this year is the absolute most uncertain because of the extremes the potential crop has been through,” he said. “The USDA has probably not accounted for what has been lost. How big is the Texas crop? I have no clue.”

Robinson said there is less uncertainty about cotton crops outside Texas other than delayed plantings along the Mississippi Delta due to wetness. Some analysts believe actual planted acres may be lower than prospective planting estimates in the Southeast and California due to historically high corn prices.

But there is no way to say losses in Texas might be made up elsewhere, he said. That uncertainty could lead to volatile cotton prices until September, when the USDA will have survey data from certified acres.

“Cotton prices have been below 80 cents per pound, and I would think this type of change would mark an increase in prices,” he said. “I wouldn’t be surprised to see cotton over 90 cents, but I would be surprised if it stayed there. I don’t expect prices will be stable with this much uncertainty.”

Uncertainty can drive price speculation, but speculation is likely to trigger roller coaster prices throughout the season, Robinson said.

Last year, three out of four cotton acres in Texas were not harvested, he said. The market reached $1.50 per pound in May and June before falling 50 cents and then rising again to around $1.15 per pound by late summer. Yet, when the 2022 crop production was clearer, prices settled down in the 80-cent per pound range.

Robinson said price increases are good news for Texas growers with crop potential. He doubts 80 cents per pound is a breakeven price due to inflation on inputs like seed, fertilizer, management chemicals and diesel.

Growers should lock in at prices they feel will be profitable for their operation, he said.

“The market will live with uncertainty all summer long, and there should be an opportunity or two for good prices,” he said. “But you don’t want to be holding on when the air goes out of the balloon.”

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