Over a three-day period, I drove from Clarksdale, Miss., to Memphis, Tenn., to Dyersburg, Tenn., to Cape Girardeau, Mo., and back to Memphis. A few fields had six- and seven-leaf cotton, many were in the two- to three-leaf stage and, in some, the cotton was just emerging.
In these pages recently, Extension specialists have noted that last year’s crop got a late start, and farmers still finished with strong yields. Unfortunately, growers weren’t able to harvest all they produced because of tropical storms and hurricanes.
Therein lies the rub. Unless farmers enjoy near-ideal weather conditions from now until November, the 2003 crop may be another disappointment.
The markets, which initially appeared to be ignoring the adverse weather conditions in the north Delta and now the Texas High Plains, have begun to notice, or at least the cotton merchants who have people actually looking at the crop, have.
O.A. Cleveland, a retired Extension marketing specialist who writes a weekly marketing newsletter, says that the trade, or the merchants, have “run all over” the speculative funds since USDA’s June 11 Supply/Demand Report noted that early-season production problems were occurring in key growing regions.
Because of the potential shortfall and the continued strong international demand for cotton, USDA increased its U.S. export estimate for the 2002/03 marketing year by 400,000 bales to a record 11.4 million bales. U.S. ending stocks, meanwhile, were reduced to 4.5 million bales, a far cry from earlier forecasts of 5.5 million to 6 million.
On the day USDA released its report, December cotton futures closed up 2.87 cents at nearly 59 cents per pound. Cleveland and other analysts believe the December contract could go to 63 cents or higher over the next few weeks.
All of that will be of scant comfort to upper Mid-South growers if they can’t harvest their late crop.
It’s against that backdrop that the House and Senate Appropriations Committee chairmen and Vice President Dick Cheney reportedly have agreed to an overall spending plan that could lead to significant budget cuts for agriculture in the 2004 fiscal year that begins Oct. 1.
USA Rice Federation staffers say the new plan means the actual House agricultural appropriations spending level is $843 million below last year, a reduction of about 4.8 percent. Others report a $393 million cut in discretionary spending for the House ag appropriations FY04 target.
However it plays out, the reduction appears to be part of a White House-Republican Congressional leadership effort to make a stab at trimming spending in the wake of President Bush’s new round of tax cuts.
USDA officials are saying the new reductions will provide more than $4 billion in tax relief to farmers in 2003. But tax relief won’t mean much to farmers who don’t have income to report.