A survey of cotton producers at the Mid-South Farm and Gin Show indicates that many of them plan to increase corn acres at the expense of cotton this season, although weather at planting time for corn will play a role in the final tally.
The best news many are hearing is that cotton's flat price movement may be short-lived, with better prices maybe coming by this time next year.
Joe Nicosia, chief executive officer, Allenberg Cotton Co., in Memphis, told producers in a morning cotton update session at the gin show that the bull market for corn may be just what the cotton market needs to get cotton fundamentals back in line.
Alamo, Tenn., cotton producer Jimmy Hargett is planning to add more corn acres this year, after not planting any in 2006, “because it was around $2 a bushel back then. Now that it's $4 a bushel, it's a very enticing offer to me.”
But how much he plants depends on how long he can keep the corn planter in the field this spring. “My corn acres will be determined by how much I can plant between March 25 and April 15, which is our normal planting period for west Tennessee corn. If it rains half of those days, I won't have much. If it's pretty every day, I'll have more.”
Hargett has booked about 60 percent of the corn he intends to plant at $4 a bushel. His operation is set up to rotate corn, cotton and soybean ground, so he won't have many changes to gear up for more corn.
Cotton will still be a big crop in Hargett's mix, although the markets are a concern. “What happens to the cotton industry in the United States begins and ends with China. They control what I get for cotton.
“Why am I sticking with it? All my life I've raised cotton, corn and soybeans. Soybeans have paid the rent, corn has paid the rent and part of the debt and cotton has paid the debt. It's been my most profitable crop.
“There are a lot of if, ands and buts about corn. If you get aflatoxin, you don't have much of a crop. If it's dryland corn, you're playing with a quick stick.”
Hargett is known across the Cotton Belt as a pioneer in the development of the on-board module builder now available on new Case IH harvesters.
Last year, Hargett picked 10,000 bales of cotton with four of the on-board module builder harvesters.
Hargett's son, Stoney, who also farms around Alamo, said, “I don't know if that question has totally been answered yet,” when asked his cotton acres for 2007. “I may be at zero.”
Part of the reason for his indecision over acreage has to do with the demise of his cotton picker last fall. “It burned up. I already had 450 acres of wheat planted, and I knew I was going to raise some corn. But now, with losing the picker and the good market for corn, I've been increasing my corn.”
Hargett is planting about 1,000 acres to corn in 2007, leaving him with 500 acres to grow either cotton or soybeans. “With everything leaning toward grain, it might make more sense to go with soybeans, for at least one year anyway. Then I can change back.”
Hargett believes that long-term, the grain market will help pull the cotton markets back up. “If it gets to a point where we see less cotton acreage, we'll have some competition between grain and cotton. And that's good for everybody. It will take this year for sure and maybe another year.”
Allenberg's Nicosia projected U.S. cotton acreage could decline to around 12.5 million acres in 2007, with the biggest loss in the Mid-South, where growers have more planting flexibility.
“We need one year of this acreage switch to bring stocks down to levels where price will have to rise to protect production.”
Stoney Hargett's 15-year-old son, Austin, is looking to farm full time in a few years and has already expressed his interest in grain crops. “That's a factor in the grain decision, too,” Stoney said.
Hargett says going to grain will not require big equipment purchases. “Nothing too major, anyway. My biggest purchase was a Brandt hipper-roller to put my low ground corn up on a bed.”
Jimmy McMeans, who farms cotton and corn in Athens, Ala., is increasing corn by 400 acres while reducing cotton an equal amount, due to “good prices for corn and the low prices for cotton.”
McMeans is holding off on pricing corn for the moment. “Yes, I'm thinking it could go a little higher.”
McMeans' existing combine will suffice for the additional corn acreage. “If I had to go out and buy new hopper bottoms, a combine and a corn head, I'd stay with my cotton. But I don't think corn prices are going to stay up there. And I think cotton is going to come back.”