This week the cotton market took another blow by dropping a few more cents. While almost everyone has been waiting for the market to climb its way back to 70 cents, it seems now that the chances of that happening are bleak. Since there are many sources of market analysis available we will not try to analyze the market here other than trying to hash out some of the fundamentals behind the price moving lower. Of course the largest factor weighing down the market is the huge surplus of cotton that has been built up in China over the last 5 years. Add in the fact that the Chinese and Indian (the two largest cotton producers) governments continue to have cotton programs that do not encourage their growers to reduce acreage when cotton prices drop. In the US (the third largest producer) cotton farmers have reduced the number of acres planted to levels not seen since the 1980s. This would seem to help pull the market up and force some of the cotton stockpiles to be sold, but it has done little to the market. Also, it would appear that the US crop is going to be quite large, at least in Texas and Georgia, the two largest US cotton growing states. Reports from West Texas indicate that they could produce a bumper crop given the moisture levels present there that haven’t been seen in four years. Across Georgia it appears that the cotton crop is doing well. There are isolated areas that have seen little to no rain all season but the overall crop looks to be on track or surpass the 850-950 lb/ac levels we have become accustom to in South Georgia.
Even with a good looking crop now the real story will come at harvest. Harvest time can be very nerve racking for producers since most producers in the Southeast know that we are always one hurricane away from losing a whole crop. A recent UGA Extension blog, Climate and Ag in the Southeast (which I recommend you follow), recently posted the latest climate predictions for the tropical storm season. NOAA is predicting a 90% chance of having a below normal tropical storm season. While this is just a prediction, hopefully it will ease the nerves cotton producers who know that making a bumper crop this year is imperative to surviving these low cotton prices.