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Domestic cotton yield, price outlooks shrink this season
 


By MATTHEW D. ERNST
Missouri Correspondent

JACKSON, Tenn. — Higher temperatures in August ironed out some worries of unusually low cotton yields in West Tennessee. But global supply and demand are keeping cotton futures below 70 cents a pound, meaning Mid-South cotton growers must carefully manage defoliation for a profitable harvest.
July temperatures in Jackson were more than 5 degrees below the monthly average since 1981, according to the National Weather Service. But August temperatures were less than 1 degree from average, and early September warmth helped.
“The West Tennessee cotton crop as a whole has made up much lost ground over the past month,” said Tyson Raper, University of Tennessee cotton specialist. “Still, with cool temperatures in the forecast, it does not appear that all of the bolls we’d like to pick will end up in the basket.”
Reduced yields are not limited to West Tennessee. September’s USDA national cotton harvest forecast is 16.54 million 480-pound bales – a 28 percent increase from the 2013 harvest, but 960,000 bales fewer than forecast in August.
Drought is still impacting fields in Texas, the largest cotton producer, and more than 10 percent of the crop in Alabama, Georgia and Oklahoma had a “poor” rating, according to USDA’s Sept. 14 report.
Some crop quality is pest-related; spider mite populations reached levels not seen in 50 years in Alabama and Tennessee cotton this summer. But lower yield outlooks are mainly the result of weather – not quite enough heat units or, like in some Texas dryland fields, too little rain.
The cooler season slates West Tennessee for a later harvest. Raper said that means paying special attention to defoliation applications. “Historically, we do not get enough heat units to justify delaying an application past the first week in October, and this year does not look to be an exception,” he said. “If your field has not received a shot of defoliant by the end of that week, it is likely in need.”
Price and trade outlook

With prices in the 60s, managing for yield is critical to cover variable costs across the Cotton Belt.
“The smaller U.S. crop should provide some support for prices, but the increase in total world production, reduction in use and increase in stocks may also weigh on the market,” said Don Shurley, University of Georgia cotton economist.
The USDA forecast pegs cotton prices for this marketing year at 58-68 cents per pound, well below breakeven prices for most of the Cotton Belt. UT estimated this season’s breakeven prices per acre at 66-76 cents for no-till dryland cotton yielding 875 pounds.
The September breakeven price projection for 2015 is 84 cents to cover variable and fixed costs.
As with grains, greater global supplies are tamping down price. The USDA’s forecast increased India’s cotton crop by 1 million bales over August estimates, offsetting the U.S. decline. Increases in Turkey and some African cotton exporters are also supporting global supply.
A smaller U.S. crop means fewer cotton exports. The United States shipped 13 million bales from the 2012 crop, but that dropped to 10.53 million for the 2013/14 marketing year. Only 10 million bales will be exported in 2014/15, according to the USDA.
Despite that decline, the agency projects global cotton use will grow 4 percent in 2014/15 as global mills source more cotton from Africa and Asia and draw down some stocks from the Middle East and Asia, notably China.
9/26/2014