This year’s U.S. cotton crop could be the second-largest since 2006, according to the National Cotton Council’s respected survey of growers. Cotton Council economist Jody Campiche says growers intend to expand cotton plantings by nearly 4 percent, lured by strong cotton prices compared to likely returns from competing crops such as corn and soybeans.
Economic growth around the world will boost cotton demand sharply at the same time China, the world’s largest cotton spinner, is working through a mountain of stockpiled domestic cotton. The Asian giant easily could become the world’s largest importer again, said the Cotton Council, an umbrella group representing the industry from growers to apparel makers. The United States is the world’s largest cotton exporter, with a market share of nearly 40 percent. Prices for polyester, the manmade fiber that competes with cotton, are rising, which gives clothing companies a reason to consider using cotton in their products.
In the Cotton Council survey, conducted from mid-December through mid-January, growers indicated plantings of 13.1 million acres, including 12.8 million acres of upland cotton and 254,000 acres of Pima cotton. The upland figure is well above USDA’s projection of 11.2 million acres, based on November conditions. The USDA will update its figures at its Ag Outlook Forum on Feb. 22 and 23.
“History has shown that U.S. farmers respond to relative prices when making planting decisions,” Campiche said. “During the survey period, cotton futures prices were stronger relative to competing crops. The price ratios of cotton to corn and soybeans are more favorable than in 2017. However, soybeans are expected to provide competition for available acres in 2018, due in part to the lower production costs relative to cotton.” Ginning costs are a challenge for growers, she said, because prices for cottonseed are low, reducing the revenue that growers see from separating cotton fiber from the seed.
Texas, the largest cotton state, is expected to see 7.17 million acres of cotton this year, up from 6.9 million acres in 2017.