COTTON NEEDS TO BE PROFITABLE SO COULD IT BE A GOOD BET FOR 2020?

Producers are trying to make planting decisions right now. Could cotton be a good bet for 2020?

“[The markets] have rebounded some from the [low] 60 cent level,” says Ashley Arrington, founder of Agri Authority. “We’ve spent a good bit of time in the 60 to 65 cent range. We hit 70 cents but it still isn’t that exciting.”

Arrington says cotton needs to be profitable and those levels aren’t exactly profitable for farmers in the South. She says producers need to make irrigation decisions sooner rather than later. That decision could be the difference between planting cotton or corn.

“We don’t plant cotton until May but if [farmers] are going to rotate, we need to make more decisions,” says Arrington.

She says another part of the equation is equipment costs. Arrington says farmers can’t let a big piece of equipment sit idle, especially if it’s used for planting and harvesting cotton.

“[Growers] are not going to completely drop off from cotton,” says Arrington. “[However,], they will decrease acres some.”

At the same time, the National Cotton Council released its findings for its Annual Early Season Planting Intentions Survey. During its NCC’s 2020 Annual Meeting in New Orleans, Louisiana. According to NCC, U.S. cotton producers intend to plant 13 million cotton acres this spring, down 5.5 percent from 2019 (based on USDA’s February 2020 estimate).

NCC says upland cotton intentions are 12.8 million acres, down 5.6 percent from 2019. At the same time, extra-long staple (ELS) intentions of 224,000 acres represent a 2.7 percent decline.

Arrington says the gins are moving some cotton. However, she mentions ginning costs are rising now more than in the past.

www.agprofessional.com