Louisiana's cotton acreage dropped dramatically this year as growers planted around 325,000 acres — only slightly more than half of what was planted last year.
According to Kurt Guidry, this downturn in acreage threatens the cotton industry's infrastructure in the state. “Typically, we've been anywhere from 650,000 up to a million acres of cotton over the past 10 or 15 years, and we have an infrastructure built around that,” said the LSU AgCenter economist.
But high prices attracted many traditional cotton growers to corn, which had a record 750,000 acres in Louisiana this year.
Sandy Stewart, LSU AgCenter cotton specialist, says the infrastructure of the cotton industry already is feeling the effects.
“We've got several gins in Louisiana that probably won't open in 2007 because the acres are so low. If our acres remain low in 2008, as it appears it will, there will be some more effects on the ginning industry.”
Guidry and Stewart agree, however, that it would take several years of low acreage to seriously damage cotton's infrastructure.
Part of the infrastructure's downfall is that cotton is somewhat of a self-contained crop.
“One of the problems that cotton has is some of the equipment — the pickers, and then you get into the gins and warehouses — these are used basically just for cotton,” Stewart explained.
If the low acreage continues, the problem will affect more than just cotton gins and warehouses. Crop consultants, chemical and fertilizer dealers, seed distributors and aerial applicators all would feel the crunch.
“If you look at what they are replacing cotton acres with, they are replacing it with corn,” said Guidry. “You spend a lot more money on an acre of cotton than you do on an acre of corn, particularly in the case of herbicides and insecticides.”
Even high corn and soybean acres cannot make up for the lack of cotton production.
“The business these consultants and dealers do with cotton is a larger volume than what they would do in an equivalent acreage of corn or soybeans, so cotton pumps a lot into a rural agriculture economy,” said Stewart.
If the infrastructure starts to break down, it could be a hard recovery for Louisiana's cotton industry.
“What happens five years down the road if this corn market starts to dry up and people start looking at planting cotton again, and we won't have the infrastructure to service that industry anymore?” Guidry asked.
“It takes a lot of cotton in an area over a number of years to ever justify building a gin.” Stewart added.