You’ve been granted free access to this subscribers only article.
Large cotton supplies, weather will weigh heavily in 2013
By Blair Fannin
COLLEGE STATION -- Record-high carryover stocks of cotton and future weather patterns are just a few factors affecting cotton prices heading into 2013, according to a Texas A&M AgriLife Extension Service economist.
“We will see a cutback in Texas cotton acreage as farmers take advantage of strong corn, wheat, and sorghum prices,” said Dr. John Robinson, AgriLife Extension cotton economist in College Station.
Robinson said cotton prices are still adjusting to historic prices in 2010-11 when $2-plus per pound cotton prices led to higher world production and reduced consumption. That set of circumstances led to record-high carryover stocks of cotton worldwide and weaker prices.
Robinson said China accounts for about half of the world’s carryover stocks, and most of those are held off the shelf in government reserve, he said.
“The combination of these bearish fundamentals and policy uncertainty sets the stage for what we may see in 2013,” he said. “We can certainly expect significant reductions in cotton acreage, starting with Australia, Brazil, and Argentina last month.”
With the strength in 2013 corn, soybean, and wheat future prices, Robinson said there will likely be major shifts to grains and oilseeds in the Midsouth and Southeast. He projects if U.S. cotton planted dips to 8.9 million acres, “We could still see 14 million bales of production.”
“I would project a likely range of December 2013 prices at 65 to 85 cents per pound,” he said. “The upshot is that the insurance base price established in early 2013 will likely be in the 70 cent range -- far, far lower than in the previous two years.”
The continuation of the sovereign debt issues in Europe or fiscal cliff fears in the United States “will only reinforce negative to slow economic growth in 2013,” he said.
“That suggests little room for a demand-driven rally in cotton prices,” Robinson said. “In addition, if some major cotton-producing country has a production disaster, the market shock could easily be squelched by China simply releasing some of their government reserve stocks. In short, weak demand and policy distortion will likely keep the upside capped and the downside open.”
Blair Fannin is an associate news editor and communications specialist with the Texas A&M AgriLife.
Your Opinions and Comments
Be the first to comment on this story!
You must be logged in to post a comment.
Agriculture Today Archives
Beef cattle seven-year decline ends (May 18, 2016)
Educational video for water well owners (May 18, 2016)
Free Beef Quality Assurance training set for May 25 (May 18, 2016)
Fretwell wins Region 8 high school all around rookie saddle (May 18, 2016)
Grant to restore, enhance the monarch butterfly habitat (May 18, 2016)
Grass-fed beef conference (May 18, 2016)
Gun safety and barbecue in New Braunfels (May 18, 2016)
La Vernia Poultry Judging wins state, advances to nationals (May 18, 2016)
Lawn, landscape, rainwater program May 21 in Floresville (May 18, 2016)
Lesser prairie chicken off the list (May 18, 2016)
Livestock Market Reports (May 18, 2016)
Luling Foundation Field Day (May 18, 2016)
Protecting your tomatoes (May 18, 2016)
TDA Market Recap (May 18, 2016)
Texas Hay Report (May 18, 2016)
As El Nińo fades, expect warmer, drier weather says Texas A&M expert (May 11, 2016)
Floresville team wins second at state (May 11, 2016)
Livestock Market Reports (May 11, 2016)
Llamas, load up! (May 11, 2016)
TDA Market Recap (May 11, 2016)
Texas Hay Report (May 11, 2016)
Transplanting mountain laurels (May 11, 2016)
2016 La Vernia Junior Livestock & Poultry Show (May 4, 2016)
Beef, forage symposium May 10 (May 4, 2016)
Cattle raisers’ crime watch (May 4, 2016)
Corn acreage increases in Texas (May 4, 2016)
Help controlling the weeds (May 4, 2016)
Krueger leads the way at La Vernia stock show (May 4, 2016)
Land Heritage nomination deadline nears (May 4, 2016)
Livestock Market Reports (May 4, 2016)
TDA Market Recap (May 4, 2016)
Texas Hay Report (May 4, 2016)
May 2016 Gardening Calendar (May 1, 2016)