Cotton prices, acreage hitting record levels

ISLE OF WIGHT – With cotton prices hitting historic high prices in recent months, Isle of Wight County farmer Rex Alphin says he will be planting twice as much of the cash crop this spring.

"We're doubling our cotton acreage this year, from 300 acres to 700 acres," said Alphin, whose family has farmed Sunset View Farm in southern Isle of Wight for generations. "These are record prices and we don't know how long they are going to last. It's a volatile market … that changes all the time."

Although cotton prices have peaked as high as $2.11 per pound in recent weeks, it was going for $1.20 per pound on Friday, Alphin said.

Spencer Neale, a commodities specialist with the Virginia Farm Bureau Federation, said the wave of government uprisings and turmoil in the Middle East has driven up oil and food prices, which have contributed to recent dips in cotton prices.

A year ago, cotton was selling for about 66 cents a pound, Alphin said. Cotton growers in rural Isle of Wight, Surry and Southamptoncounties produced a significant amount of the 82,250 acres planted in Virginia last year.

The Virginia Department of Agriculture and Consumer Services estimates cotton acreage will hit 105,000 this year, a 27 percent surge from 2010. Farmers planted 58,000 acres of cotton in 2007.

"Cotton prices right now are the highest they've been in years, and that has influenced farmers' planting decisions," said Virginia Agriculture Commissioner Matthew J. Lohr, in a press release. "They can book some of their crop at a very good price. With weather permitting, even with higher fuel and fertilizer costs, they should be able to have a profitable crop year."

Between last summer's drought, which was followed by about 20 inches of rain in September, cotton crops across southeastern Virginia were wiped out last year.

But Alphin said that made him realize how resilient cotton is, particularly with genetic seed modifications developed over the last five years, making the crop more drought resistant and alleviating the need for herbicide sprayings throughout the growing season. Farmers pay the upfront cost for the high-tech cotton; a 50-pound bag of traditional cotton seed costs $140. The price jumps to about $500 a bag for the genetically-modified seeds.

World events, including flooding and heavy rains that damaged crops in Pakistan and China respectively, have played a large role in increased cotton markets, Neale said. Approximately 80 percent of the cotton grown annually in the United States is exported to Chinese textile mills for manufacturing into products, most of which wind up back in the United States.

Virginia's three cotton gins are equipped to handle the increased acreage, Neal added. One ginning company is planning to start up a second gin, which has been idle for the past couple of years, he said.

(Source: http://www.dailypress.com/news/isle-of-wight-county/dp-nws-cotton-acreage-20110225,0,7153887.story)