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Texas Agriculture Archive

October 4, 2002

Dynamite cotton crop, disappointing price

By Lana Robinson
Field Editor

Farmers in many of the state's cotton producing regions are celebrating the dynamite cotton crop in 2002, but wish prices could be better.

Texas Farm Bureau President Donald Patman, who in mid-September was stripping some 1,800 acres of cotton on his Ellis County farm, said, "This is the best we've ever made in our part of the country. We're making close to two bales an acre—a little under in some places and a little over in others. In the early 1980s, we had one field to make two bales. That was the first time. This year, every field is making it. That sure puts you in a better humor when you're making the rounds on the stripper."

Patman said the weather cooperated, with timely rains and fewer-than-normal 105-degree days and scorching winds that often do damage during the summer growing season.

"We've had a few worms on the non-Bt cotton, but insect pressure has been low. Our square set percent this year was the best we ever had. We didn't lose a lot of those to insects early," he said.

Continued low prices for cotton underscore the importance of the countercyclical payment provision Farm Bureau fought so hard to see included in the new farm program.

"I've been trying to sell some of it today, and it's 35 cents, " Patman reported, Sept. 24. "The LDPs (loan deficiency payments) were 20 cents through the sales and about 30 cents from the program last year. It's 35 cents this year and the LDP is $16.84. It's predicted to go down again Friday. So the price is about the same as it was last year, but we do have a better farm program. Still, we'd rather get it from the market than the government."

Dr. Carl Anderson, cotton marketing economist, said it looks like cotton farmers' income will be about half and half.

"The market doesn't want it there's so much supply. It only takes it at a really depressed price," Anderson observed. "I don't see anything there to make the price go up. They'll get the loan price for cotton plus the countercyclical payment and direct payment. That's their cashflow.

"The good news is on the loan rate. The price plus LDP is based on all your level of production. Farmers fortunate enough to have a way above average yield will get that extra income, based on yield. Then they'll get the other payments, the counter-cyclical according to base acres and program payment. Yields for 2002 come off the old base and payment yields. They can update that starting Oct. 1 for the '03 crop forward."

Anderson said Texas will produce about a 15 percent better crop over all this year than in 2002.

"We planted last year 6 million acres. This year, it was 5.8 million acres. We lost 1.2 million to drought and hail and so forth. Look's like about a 4.6 million acre harvest, with an estimated 501 pounds per acre on harvested cotton," he said. "It's been a mixed crop, statewide, everything from a million plus acres lost to some acres making far above average yields."

Anderson said the crop from Raymondville to Harlingen burned up early. Although much of the Rolling Plains all the way to the Southern High Plains received good moisture, some areas didn't get enough rain early on to make a crop. Cotton failed south of Lamesa, in the drought-stricken Big Spring area.

"Some producers in the Brazos bottom are making around three bales. It's too bad they didn't plant more. The farmers around Taylor (Williamson County), where I come from, got beat up so bad with rain at harvest last year, and got terrible quality and terrible price. They planted corn instead and got beat up again," he said.

Anderson said it was an excellent year for the boll weevil program to get started out on the Texas Plains, with weevil numbers down.

"Harvest is just getting underway in Lubbock. They applied harvest aid chemicals last week (mid September). The classing office just received a couple of hundred bales of samples. They'll run 2.4 or so million bales at the sampling office in Lubbock. It was 2.1 million last year. The irrigated crop north of Lubbock is better than average."

Anderson said to remain competitive, the industry will continue making changes in order to increase yield and lower production inputs.

"The answer to lower costs are new varieties that can boost average yields. If we can just turn the cost of production down a little bit, it will open a window to substantially increase net returns," he said. " You increase yields steadily and reduce input costs, till the land less...Most of all, we need to compete with synthetic fibers. China has the capacity to produce a great deal of polyester. The time was when China would purchase a lot of U.S. cotton. That goes in cycles. We are still in hopes they might import or buy a large supply, perhaps 600,000 to 800,000 bales. They bought 400,000 from us last year. A few years back, they bought a million to half.

"The good news is as we look at foreign production of a little over 70 million, the expected consumption is over 88 million. That's a positive glimmer when we see that kind of a gap between production and their consumption in foreign countries. The deficit gap provides some opportunities. We're still going to have to be very competitively priced."