Cotton crop growing as sale prospects shrink
Hoping to turn a profit, Virginia cotton growers planted 7,000 more acres this year than they did in 2018, but cotton prices have dropped significantly.
“When we were making planting decisions last winter, the cotton market was the only one showing a profit,” explained Shelley Barlow, a Suffolk cotton grower and member of the Virginia Farm Bureau Federation Cotton Advisory Committee. “And we have pretty good reliability raising cotton in our area. The fact that the bottom has fallen out of the cotton market since then hasn’t been good news to us.”
The U.S. Department of Agriculture’s June 28 commodity report found that Virginia cotton growers had planted 105,000 acres in 2019. Corn acreage in the state increased even more dramatically from last year. Corn growers planted 530,000 acres this spring, an increase of 45,000 from 2018.
For Southeast Virginia farmers, Barlow explained, the increase in cotton and corn plantings is a consequence of the soybean market loss due to U.S. trade disputes with China. Soybeans were the state’s top export commodity in 2017, and China was the top buyer.
“Cotton, peanuts, corn and soybeans are the only row crops to pick from in our area, and we’ve been out of the peanut business for 15 years,” Barlow said of her family’s farm. “Cotton is our most drought-resistant crop. Cotton starts blooming right now, and even if it turns dry we can get harvestable blooms from the bolls if we get some rain from now to mid- to late August.”
But Chicago Board of Trade prices for cotton this summer are currently below her cost of production, which is a big drop from last winter.
“It’s 100% the trade dispute with China that soured the price outlook for cotton,” Barlow said. “China is our No. 1 market for cotton. It wasn’t always way out of balance; last winter the market was optimistic the trade war would be ending soon. World demand for cotton is also going down, pushing prices even lower.”
Barlow said she has been trying to use the commodity futures market to price some of her cotton crop in advance of harvest, with little luck.
“We can sell cotton a bale at a time, or 500 pounds at a time. So I watch for opportunities to go ahead and price that crop while we’re growing it. But right now I can’t do that and make a profit,” she shared. “We would love to get 90 cents a pound for our cotton. We can survive on 80 cents a pound. But prices have been flirting with 60 cents a pound in recent weeks.”
A recent dry spell hasn’t helped brighten the outlook. But cotton growers are still spreading fertilizer and doing all they can to make a good crop.
“All we can do is sit and hope for rain, and for prices to turn upward,” Barlow said.