What is in this article?:
• Dollar a pound prices buffed up the crown of King Cotton and just may bring it back to pre-ethanol acreage.
• Peanut contracts with more than one five in them seems to have rejuvenated interest in planting that crop.
• Corn at $5.50 a bushel is still a money-making proposition for most farmers, especially those in the upper Southeast.
The upswing in grain prices over the past few years, fueled by the need for corn for ethanol and by some creative financial investors, has knocked cotton off its throne and put peanuts in a life and death situation for acres in the Southeast.
Will the two traditional crops in the Southeast make a significant comeback in 2011?
Dollar a pound prices buffed up the crown of King Cotton and just may bring it back to pre-ethanol acreage. Likewise, peanut contracts with more than one five in them seems to have rejuvenated interest in planting that crop.
Typically, an increase in cotton acreage in the Southeast means a drop in soybean acreage. That may happen, but at $12 a bushel, it’s hard to understand how or why. Good prices aside, Charles Hall, executive secretary of the North Carolina Soybean Growers Association, says he expects a significant reduction in acreage in the Southeast’s largest soybean producing state.
Corn at $5.50 a bushel is still a money-making proposition for most farmers, especially those in the upper Southeast. With continued public interest in and political pressure on increasing alternative fuel production, the future for corn looks good for the next couple of years.
Worldwide demand for wheat remains good and prices are stable. Though wheat doesn’t directly factor into 2011 planting decisions, it does affect total acreage, because of the opportunities for double-cropping with wheat and barley.
Barley at $4.40 a bushel, or 80 percent of corn futures, combined with double-cropped beans at $12 a bushel, looks like a worthy opponent, especially in the upper Southeast, where cotton and peanut production are a bit more influenced by the weather.
December 2011 cotton futures closed recently at 97.96 cents per pound. Prices for this year’s crop, sold in December at the unheard of price of $1.42 a pound. Uncertainty over China’s cotton prices, continued demand for cotton products and the continued weakening of the U.S. dollar have combined to put Southeast growers in a quandary about how much cotton to plant and what crop to replace.
The 2010 crop is mostly already sold and the remainder should be sold when the bales are available. Producers should strongly consider pricing a portion of the 2011 crop. The U.S. will plant more cotton in 2011, says University of Georgia Economist Don Shurley.
Before growers jump to the economic calling of cotton, they should consider the short- and long-term costs of ramping up cotton production or getting into production for the first time.
All, or virtually all, costs will be up in 2011. Fertilizer prices are already projected to jump in response to the high crop prices. Crop insurance will be increased in response to the higher value of cotton and other crops.