2014 Cotton Year Highs & Lows Impact 2015 Profitability

cotton 

What shaped the 2014 season? How will 2014 shape the 2015 season? In this issue we’ll take a look at the Farm Bill, economies of scale and in-season challenges. Let’s get right to it!

Cotton started out the year with strong predictions for acreage increases and the June USDA planted acreage report held the final confirmation: All cotton planted area was estimated at 11.4 million acres, 9 percent above 2013.

After more than two years of discussion, the country saw a Farm Bill signed into law on February 7, which will remain in force through 2018. The Agricultural Act of 2014 will be implemented in 2014 and 2015. Informational meetings continue to be held across the country to help growers understand the nuances of the bill. New acronyms and new limits are the hallmarks of the complex program.

Highlights of the new law include:

  • Repeals Direct Payments, Countercyclical Payments, and the Average Crop Revenue Election (ACRE) program.
  • Creates two new programs—Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC). Producers of covered commodities can choose to enroll in one of the two programs.
  • Upland cotton producers are not eligible for PLC or ARC, but they are eligible for a new crop insurance product under Title XI—the Stacked Income Protection Plan (STAX). Cotton producers will receive transition payments while new STAX policies are implemented (see Crop Insurance Overview for further details).
  • Revises payment limitations and adjusted gross income eligibility rules.
  • Continues the marketing assistance loan program as is, except for an adjustment in the loan rate for upland cotton.
  • Continues the sugar program unchanged.

Specific to cotton, STAX will be implemented beginning with the 2015 crop year and will be administered by USDA’s Risk Management Agency. According to the National Cotton Council Chairman Wally Darneille, STAX will be available for upland cotton in all counties where federal crop insurance coverage for upland cotton is currently offered. “This will provide our nation’s cotton farmers with a solid risk management mechanism so they can continue producing safe, abundant and affordable food and fiber.”

Growers will make a decision on PLC or ARC that is locked in for the life of the bill and they can only adjust crop bases for PLC or ARC crops based on recent plantings.

Cotton price highs and lows

On the economic front, as growers began making planting decisions for 2015, cotton prices reached an 85-cent high basis for the December New York futures contract, said O.A. Cleveland, cotton economist and professor emeritus of Mississippi State University.  “The three-year drought in the Southwest lingered and with no rain in sight, the idea that the price could climb to 90 cents kept grower intentions at 10.5 million acres and opened the possibility of an 18.5 million bale crop,” he said.

“Cotton historians have always said that the Texas/Oklahoma/New Mexico plains must have rain by the first week in June to make a crop—and for the first time in four years the rains came and took the market down to 70 cents seemingly overnight.”

Following indications that India would produce a record crop and supplant China as the world’s leading cotton producer, price slippage continued, falling to 62 cents by mid-August. However, the southwestern plains failed to receive any additional moisture, the Indian monsoon began to disappoint, and dry weather led to lower than expected Chinese plantings.

“The market awaits the action of Mother Nature and what she holds in store for the U.S., Indian and Chinese harvests,” Cleveland continued.  Additionally, the demand side of the price equation has benefited from much stronger exports to China than had been predicted by the USDA.  “The Chinese textile mills have voiced a strong opinion for importing machine-harvested quality types of cotton found in Australia, United States and Brazil.  The primary source for this high-quality cotton has become the United States and if demand can hold, growers will be rewarded by the market as the marketing year progresses.” 

Cotton Field Notes
What happened on farms around the Belt in 2014? Bayer agronomists from Texas, Mississippi and Georgia weigh in on the season highlights.

Southwest

Kenny Melton is the Crop Science agronomist for the Southern High Plains of Texas. He said the West Texas crop will be late by anyone’s standards. “We started the season with the potential for another drought disaster,” he said. “Irrigated growers were having trouble getting their crops established and nothing was being planted on dryland acres. We got a rain on Memorial Day weekend and everyone went into high gear to get planted by the crop insurance deadline.”

North of Lubbock into the panhandle a lot of cotton was lost to seedling disease from the cool snap and rain during planting. Growers there are on the northern tip of the Belt and it was too late for many in that area to replant. Much of that lost acreage went to grain sorghum and corn.

Weed resistance has been a reality this year for Texas growers. “Weed resistance is everywhere now and growers are learning how they can use Liberty herbicide with our GlyTol® LibertyLink® varieties to help manage their weed issues more effectively,” Melton said. As growers start thinking about the 2015 season, they need to plan for a full-season overlapping residual herbicide program. And when it’s time to apply Liberty® herbicide, growers need to follow the spray recommendations for weed height. “It’s extremely important to get these weeds when they’re small – no more than 2-4 inches tall – to control resistant weeds successfully.”

ST 4946GLB2: Is an early/mid-maturing variety with exceptional yield potential and the added benefits of herbicide flexibility and crop safety. It offers the distinct advantage of root-knot nematode tolerance, thus is an excellent choice for fields with known presence of this pest. ST 4946GLB2 is easy to manage with moderately aggressive growth habits. It is broadly adapted across all cotton-growing regions.

FM 1830GLT: Adapted for the High and Rolling Plains of the Southwest, this cottonseed variety has slightly earlier maturity than FM 2484B2F with similar yield potential, improved fiber quality and excellent tolerance to Verticillium wilt.

FM 2334GLT: A new variety with similar maturity to FM 2484B2F, also with improved fiber quality and excellent Verticillium wilt tolerance. 

FM 9250GL: Adapted to the High and Rolling Plains, this GlyTol LibertyLink variety offers growers in this area excellent yield potential and fiber quality. Agronomic characteristics are similar to FM 9058F with a compact plant type and large, storm-tolerant bolls.

Mid-South

Andy White, Bayer agronomist in Mississippi said for the first time in several years cotton was planted at just the right time and in optimum conditions. “Then it started raining and got cloudy and stayed that way for a couple of weeks,” he explained. As a result, the crop is about two weeks behind in maturity.

Of the greatest concern to Whiteare resistant weeds. “I’ve seen a lot of pigweed in cotton and soybeans this year,” he said. “There’s more resistance out here than growers think there is and they really need to consider the variety they’re planting in 2015.” White’s recommendation is to use a Stoneville® variety that offers the LibertyLink trait with Liberty herbicide.

Several varieties stand out for White.

ST 4946GLB2: Is an early/mid-maturing variety with exceptional yield potential and the added benefits of herbicide flexibility and crop safety. It offers the distinct advantage of root-knot nematode tolerance, thus is an excellent choice for fields with known presence of this pest. ST 4946GLB2 is easy to manage with moderately aggressive growth habits. It is broadly adapted across all cotton-growing regions.

ST 5289GLT: Offers the newest Stoneville cottonseed germplasm. This medium-maturing variety is well-adapted for the Mid-South, Southeast and Mid-Atlantic cotton-growing areas.

ST 4747GLB2: Has wide adaptation to cotton-growing regions throughout the U.S. This early/medium maturity variety confers full tolerance to both Liberty herbicide and glyphosate to help manage tough-to-control weeds.

ST 5032GLT: Offers the newest Stoneville germplasm in a variety with full tolerance to both Liberty and glyphosate herbicides, plus broad-spectrum lepidopteran insect protection utilizing two Bt genes.

ST 6448GLB2: Is a full season maturing variety well-adapted for the South Delta, Southeast and South Carolina cotton-growing areas. It has excellent seedling vigor, resulting in consistent stand establishment. ST 6448GLB2 also has outstanding yield potential and very good fiber quality, and is well-suited for irrigated and dryland production.

Southeast

Agronomist Josh Mayfield is based in South Georgia. He said Georgia growers haven’t been able to get a break this year. “We started off cool during planting and then it started raining, which meant growers couldn’t get into the field either to plant or make applications.”

As a result, he has seen more hoe crews in fields this year. “Unfortunately, after all that early moisture the rain just stopped the first of July,” Mayfield said. “In some places our dryland crop has really suffered with the high heat. The heat is also pushing the crop earlier.”

ST 6448GLB2: A full-season variety that is well-adapted for the South Delta, Southeast and South Carolina cotton-growing areas. It has excellent seedling vigor, resulting in consistent stand establishment. Additionally, ST 6448GLB2 has outstanding yield potential and very good fiber quality, and is well-suited for irrigated and dryland production.

ST 4946GLB2: Is an early/mid-maturing variety that offers the distinct advantage of root-knot nematode tolerance, thus is an excellent choice for fields with known presence of this pest. ST 4946GLB2 is easy to manage with moderately aggressive growth habits. It is broadly adapted across all cotton-growing regions.

With GlyTol LibertyLink (GL) and GlyTol LibertyLink TwinLink® (GLT) stacked technology, growers can make over-the-top applications of either glyphosate or Liberty herbicide. This provides two herbicide modes of action to control weeds effectively and reduce the potential for resistance as part of a comprehensive full-season overlapping residual herbicide plan. It also protects against the potential for damage due to off-target movement of Liberty or glyphosate from nearby fields.

Crop Science is currently the only company that offers cotton varieties with stacked herbicide trait technology for strong yields and quality. Crops with the LibertyLink trait allow growers to spray Liberty in-crop for nonselective, postemergence control of the toughest weeds, including Palmer amaranth, giant ragweed, waterhemp and marestail. The system also gives growers another herbicide application option if their pre’s don’t activate with Liberty herbicide.

 

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