US: Farmers in South boost planting of cotton, shun grains

SPEARMAN, Texas -- Tight supplies of corn, soybeans, and wheat have sent prices skyrocketing in the last year, prompting worries of a global food crisis.

In other years, American farmers have responded to high prices by devoting more land to staple food crops.

But this spring, many farmers in southern states will be planting cotton where they formerly grew corn, soybeans, or wheat. They are spurred on by cotton prices that have soared as clothing makers clamor for more and poor harvests crimp supply.

"There's a lot more money to be made in cotton right now," Ramon Vela, a farmer here in the Texas Panhandle, said as he stood in a field where he grew wheat last year, its stubble now plowed under to make way for cotton.

"It's good for the farmer, but from a humanitarian perspective it's kind of scary," said Webb Wallace, executive director of the Cotton and Grain Producers of the Lower Rio Grande Valley. "Those people in poor countries that have a hard time affording food, they're going to be even less able to afford it now."

Myriad factors determine food prices. Ethanol demand has pushed up corn prices. Wheat prices rose last year when Russia banned exports after drought devastated its crop.

Farmers typically respond by increasing plantings of the most profitable crop.

The United States Department of Agriculture predicted this year that the acreage for corn and wheat would increase, although at a slower pace than they might have without the competition from cotton.

The effect of the cotton shift is expected to be magnified internationally, as farmers in other major cotton-producing countries, such as Brazil, also respond to the high prices.

In 2010, the United States produced the equivalent of 18.1 million 480-pound bales of cotton, up 49 percent from 12.2 million bales in 2009. Still, cotton prices have only recently fallen from the historic highs of March, when ginned cotton reached $2.30 per pound, according to the agriculture department.

By April, prices had fallen to $2.17 a pound, the department said, and on the spot market Thursday, ginned cotton was being sold for $1.55 a pound.

Cotton futures fell Friday for the second straight day amid signs that global demand is shrinking.

The Confederation of the Indian Textile Industry said last week that it plans to cut production by one-third because of a "huge decline" in demand. India is the world's second-biggest cotton producer. Prices have plunged 29 percent since touching a record in March but rose 7 percent last week.

In the United States, the economics of growing cotton vary according to many factors, including regional differences and whether the land is irrigated. Farmers in several southern states said that at a cotton price of about $1 a pound, their profit could be roughly $200 to $500 more per acre than they could make growing corn or wheat. For 1,000 acres planted in cotton, that means an additional $200,000 to $500,000 profit.

"It's going to be cotton stalks everywhere," said Travis Patterson, 44, a farmer near Spearman. "The landscape's going to change," he said, describing a countryside blanketed with the white of cotton rather than the more familiar green of cornstalks.

Mr. Patterson expects to plant 1,500 acres of cotton this year, up from 600 last year. He said the frenzy was so intense that even cattle ranchers were talking about growing cotton.

Farmers said they have no choice but to plant the crops that give them the best chance of making money. They face many uncertainties, and their profits can be wiped out by bad weather, rising costs for items such as fertilizer, fuel, and seed, or unstable crop prices, which can plummet as rapidly as they rise.

The National Cotton Council expects substantial increases in all cotton-growing states, including large jumps in North Carolina, Mississippi, and Tennessee. But Texas is the nation's biggest cotton producer and will have by far the biggest increase in acreage.

The shift is particularly noticeable in the Texas Panhandle, where cotton is a relative newcomer. Traditionally, the region was too far north and the growing season was too short for cotton. But within the last decade, hardier varieties were introduced, and the crop caught on.

One reason for its increasing popularity is that cotton requires far less water than corn. Panhandle farmers tap into the Ogallala Aquifer, but that water source is being depleted and farmers face looming restrictions on water use.

So much cotton is going to be planted in the Panhandle this year -- some counties expect at least double the acreage -- that there has been talk of a shortage of seed for the most popular varieties.

"We've never seen anything like it," said Leighton Stovall, general manager of the Moore County Gin, north of Dumas, Texas, which cleans and bales newly harvested cotton. Employees at the gin are finishing the foundation of a new building, part of a $6.5 million expansion that will double the facility's capacity.

Source: http://www.toledoblade.com/news/2011/05/22/Farmers-in-South-boost-planting-of-cotton-shun-grains.html