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US Acres Could See 12% Declineqrcode

Feb. 12, 2008

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Feb. 12, 2008

Upland cotton intentions are 9.32 million acres, a decrease of 11.6% from '07. Extra long staple (ELS) intentions of 231,000 acres represent a 21.1% decrease from '07. The results were announced at the NCC's '08 Annual Meeting.

Assuming an average abandonment rate, total upland and ELS harvested area would be about 8.76 million acres. Applying state-level yield assumptions to projected harvested acres generates a crop of about 15.38 million bales. This compares to '07's total production of 19.03 million bales. Assuming average seed-to-lint ratios, '08 cottonseed production is projected at 5.28 million tons, down from 6.60 million last year.

The NCC survey was mailed in mid-December to about 40% of the producers across the 17-state Cotton Belt. Survey responses were collected through mid-January.

Dr. Stephen Slinsky, assistant director of NCC's Economic Services, said, "Despite cotton prices being approximately 15 cents above year-ago levels, the strength of futures prices for competing crops continue to draw acreage away from cotton. Coupled with USDA's recent wheat acreage report, it is evident that a wheat-soybean double-cropping rotation will attract acres from cotton and possibly corn."

Based on survey results, the Southeast, Mid-South, Southwest and Far West show intended upland cotton planting decreases of 12%, 26%, 2% and 39%, respectively.

Survey results for all Southeastern states indicate declining cotton acreage, shifting to a double-crop of winter wheat and soybeans. The Carolinas reported the largest percentage declines, between 20% and 22%. Respondents in Alabama indicated an 11% reduction in cotton acreage while Florida growers are planning a 17% cutback. Georgia and Virginia respondents indicated the smallest declines of 5% and 6%, respectively.

All Mid-South states indicate a shift from cotton to wheat and soybeans with major percentage decreases in Mississippi (-31), Arkansas (-30) and Tennessee (-29). Smaller declines are expected in Louisiana (-18) and Missouri (-8).

"This means that 2008 Mid-South cotton area intentions would be less than half of that region's 2006 level," Slinsky said, noting that there was a sharp decline in '07 acreage there, too.

In the Southwest, Kansas and Oklahoma were the only states that indicate cotton acreage increases - with 16% and 3% increases, respectively. Texas growers indicated intentions of 4.8 million acres. While this is a 2.3% drop from last year, Texas is expected to account for half of all US cotton acreage in '08.

The West region showed a projected 38.7% decline. In California, concerns over water availability and competition from specialty crops are contributing to a sharp decline. If that state's growers plant the indicated 91,000 acres to cotton, it would represent a 53.3% decrease from '07. The survey revealed that Arizona and New Mexico growers intend to decrease upland area by 25% and 27%, respectively.

Each of the four states producing ELS cotton indicated declining area. In Arizona, California and Texas, declines were approximately 20%.

Source: NCC

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