What is in this article?:
- Valley growers need to see higher prices soon to make the decision to plant more cotton.
- Prices currently range between 91 and 92 cents per pound.
- Some growers are considering planting grain sorghum instead of cotton this year due to healthy market prices for grain.
Cotton modules await ginning during the 2011 harvest in the Lower Rio Grande Valley. Cotton planting this year has been delayed by rain-soaked fields.
“Prices last year were in the mid-80 cent range per pound,” Ribera said. “For this year, I would expect to have about 200,000 acres with futures prices for July around 91.4 cents.”
But, Ribera said, those prices might rise on news that the Indian government banned cotton exports.
“India is a net exporter of cotton,” he said. “But on March 5 they shut off exports.”
With one less player on the world cotton market, supplies could drop, causing world demand—and prices — to rise.
“What matters is how long that ban will be in effect,” Ribera said. “So far, there’s been no serious impact on cotton futures prices. The market seems to still be waiting. But if the ban stands, Valley growers might be able to benefit from higher world prices.”
Prices currently range between 91 and 92 cents per pound, he said.
Cowan said Valley growers need to see higher prices soon to make the decision to plant more cotton.
“If the market responds immediately to India’s export ban with higher prices, it may not be too late for growers to switch from grain sorghum to cotton, but it will have to happen quickly because there’s a lot of ground to plant at this point,” he said.
In the meantime, healthy prices for grain sorghum are pulling growers that way, Cowan said.
“Local contracts for grain sorghum right now are at about $10 per hundredweight. That’s higher than usual. In fact, it’s pretty darn high considering prices have historically been in the $3.50 to $4 range (per hundredweight).”
But while prices have more than doubled, the cost of growing the crop has also gone up.
“It’s always a challenge to make a profit, but at $10, growers can make money. Of course, they have to make the crop first.”
In the end, the question of what and how much to plant may come down to risk, Cowan said.
“Cotton is an expensive crop to grow, so it might just come down to the risk a grower is willing to take, especially after the really dry season we had last year.”