What is in this article?:
- Cotton profit potential looking better
- Revisit Your Budgets
- Good rains in the Midwest have some analysts forecasting a normal corn year, which will likely send grain prices lower.
- Sorghum is a major crop for much of Texas.
- Numbers may support irrigated cotton.
Cotton may offer better profit opportunities in 2013 than grain sorghum, but growers should look closely at budgets and other factors.
Growers considering a shift from cotton to sorghum should put the pencil to it once more. With futures prices steadily over 80 cents per pound and early gin contracts offering nice premiums, irrigated cotton could mean $200 or more in return per acre.
In analyzing crop budgets for irrigated cotton and sorghum, the fiber crop again has strong profit potential, says Jackie Smith, Texas AgriLife Extension cotton marketing specialist in Lubbock.
“We want growers to look at their numbers and determine which crop may work best for their individual situations,” Smith says. “The ratio of the cotton price compared to the sorghum price has changed the last few months. Cotton has gradually moved up some and corn and sorghum prices have moved down.”
Sorghum is certainly a major crop for much of Texas. It’s often a savior catch crop if cotton is hailed out. But with higher grain prices in recent years, milo has been more popular as a replacement for cotton and one that can handle drier condition better than corn.
That was when cotton stayed near 70 cents, compared to corn and sorghum prices well over $7 a bushel and $13-plus per hundredweight. However, good rains in the Midwest have some analysts forecasting a normal corn year, which will likely send grain prices lower.
Of course, all bets are off if the drought of 2011 and 2012 picks up where it left off. Even growers with sufficient irrigation need a little help from the skies. And anywhere toward normal rainfall could help produce strong yields from cotton or sorghum, Smith says.