home → articles → Columnists | Email to a Friend

Farm & Ranch Happenings

published: April 16th 2010
by: Harvey Buehring

“Cotton Market Improvements Prompt Acreage Increases In South Texas”
    Springtime in South Texas has been wonderful thus far, despite the fact that March and the first half of April were relatively dry. In fact,  compared to 2009, this yearís conditions were undisputably favorable.  Spring greenery was, and still is abundant across the countryside.  Plant life, especially many varieties of wild flowers, is doing its best to recover from the drought throughout most Texas eco-systems.  Indeed,  most  flowering plant varieties  that  tolerate winter conditions and grow in cooler soils are producing a seed crop that should insure the survival of their species for the next decade. 
     Unfortunately on some rangeland, the competition from these flowering winter forbs has dried out the soil and covered the land with a dense broad-leaf canopy that has suppressed the return of native grass species.  That situation has livestock producers facing an uncertain late spring, particularly if the predictions for some wide-spread significant rain during mid-April fails to materialize.   Hopefully the rains will be timely and blanket the entire region, replenishing the soil moisture as our nighttime temperatures reach the optimal range for the growth of warm season grasses. 
    As for the row-crop farmers in the Coastal Bend, weather conditions during the past six weeks could have been classified as perfect, that is, if not for the many days with high winds.  Those folks were potentially facing a delayed planting season if conditions had not dried out during March and early April.   Thankfully, farmers were able to get their planting seed in the ground and for the most part, their crops have emerged and are off to a good start.
    In addition to a favorable planting season and a supply of deep soil moisture, farmers in cotton-growing areas of South Texas have been blessed with significant recovery in cotton futures prices and a growing demand for USA cotton from foreign textile mill buyers.  USDA is projecting that12 million bales will be sold from current inventories.  That  would require a weekly average of 290,073 bales being shipped from U.S. cotton warehouses to meet this goal before the close of the marketing year. 
    That draw-down in domestic raw cotton inventories will support the fundamental, if not speculative, side of the cotton market. Combined with that is an improvement in the global economy that typically leads to stronger consumer demand for cotton garment purchases during the late spring and summer months. These factors should provide enough support to the cotton market to allow Texas growers to enjoy significant improvements in the price of cotton for the 2010 crop.  
    In the lower Coastal Bend most farmers are indicating that, once again, they are trying to shift their cropping systems back to a half cotton and half feed-grain production rotation.  That has typically been a successful rotational program for growers in Nueces and San Patricio counties.   The last few years have shown weak cotton prices that discouraged planting the higher risk and more costly crop. Then, we were hit with the 2008-2009  drought of historic proportions that virtually wiped out cotton  production in the vast non-irrigated (rain-grown) areas of South Texas. Thankfully,  this year we are anticipating a return of over 275,000 acres of cotton in the lower Coastal Bend.
    That is great news to area ginners, cotton warehouses and oil mill operators who have had to endure a three-year downturn in their business.  It should also be good news for the cow-calf and feedlot operators who rely on cottonseed products as an important component to the winter protein supplement programs and feedlot rations.
    A return to greater cotton acreage in 2010 statewide should improve cottonseed supplies before winter feeding demands increase.  Hopefully, that will bring a return to stable pricing opportunities for those who rely on whole cottonseed and cottonseed meal products for beef and dairy cattle feeding.
    Of course there are always wildcards that disrupt what one predicts will happen during the next nine months to a year.   One of those hit me as I drove past one of my favorite refueling retailers.   Highway diesel was posted a $3.02 per gallon. Not a good sign!   I kept hoping that once the folks up north stopped purchasing heating oil for their homes it would take some pricing pressure off the demand side and allow diesel prices to drop instead of increase as mid-April arrived.   Those of who drive diesel pickup trucks can only hope for a return to the days when the cost per gallon of fuel was thirty cents less per gallon instead of thirty cents per gallon greater than the price for unleaded gasoline.
    If diesel fuel prices continue to escalate above the $3.00 per gallon mark for an extended period of time, we may see a return to increased production and utilization of bio-diesel.   That is when cottonseed oil prices will jump and livestock feed mills will have another competitor driving up the price of cottonseed.   Fortunately, bio-diesel uses the oil, leaving  the meal and hulls for the cows.
    There are innumerable challenges occurring in the wonderful world of production agriculture! Let’s hope the majority are for the better.