Table of Contents:
- Cotton plays big in Georgia
- Georgia is a cotton state
- Cotton’s farm gate value is about $1.5 billion each year in Georgia. That’s real money, but its monetary swing is even heavier and goes farther.
- Georgia cotton acreage usually stays above 1 million planted acres.
Cotton production has declined in some areas of the Southeast in recent years. I’ve heard farmers and experts say corn and soybean still grab cotton acres and infrastructure away from cotton in Tennessee and the Delta.
Cotton is one of those crops with major geopolitical ramifications. On the world stage, cotton is too often the rope being tugged by two or more countries locked in a world trade dispute. And one country’s cotton hording or buying can make bad prices good in a week or vice versa. And if you throw the market speculators into the mix, that pricing game can get crazy. Prices can shoot up 10 cents per pound in a week just to go down 15 cents the following month. I say all of that to say cotton production, or should I say cotton marketing, isn’t for the faint of heart.
Will cotton remain the top row crop for Georgia? Well, cotton’s foothold in Georgia is strong, as this study shows. When other commodity prices follow the bull, or go high, Georgia growers respond and cotton acres can and do come into play and go to corn or soybeans, but not as much as in other states.
Georgia cotton acreage usually stays above 1 million planted acres. Yes, it dipped to and below the one-million-acre mark in ’07 and certainly in ’08, but then it skyrocketed on high prices to 1.6 million acres in 2011. Since then, acreage has dropped and leveled out, hovering in the 1.2 to 1.3 million acre range.
In an average market year, if there is such a thing, cotton growers grow cotton, and sticking with historic crop rotations in the long run often pays off for growers. In Georgia, cotton and peanuts -- sprinkled with corn for financial flavor -- play well together. That said, with corn prices with “4” in the front and beans prices lower, too, well … like I said, cotton farmers grow cotton and corn, and soybeans need to compete high to grab those cotton acres.
But the market’s going to have to earn those cotton acres. And even though China is reported to be sitting on a cotton stockpile tall enough to supply the world with all the cotton it needs for more than three-quarters of a year, it’s good to remember at this time those are bales not supplying the market now. Or another way to put it: a bale of cotton in hand is better than two rotting in a warehouse in China.
Will cotton remain strong in Georgia? Sure, there will be more than 1 million acres planted again in the state in 2014, and I’d bet it will more like 1.2 million acres. But the market’s got to put the money down to get those acres. Prices in the low-80s won’t do it. Prices in the higher 80s will.
Even in a crappy growing season, like 2013, growers with the technology today can still pull off good yields. With the cotton I saw early and mid-summer in 2013 in Georgia, I’m still surprised the state’s average in 2013 was 850 pounds per acre. … but then again, I was surprised at just how large cotton’s economic footprint is in Georgia but I shouldn’t have been.