Increased demand and reduced production should pay off for US cotton farmers as the 2010 planting season gets underway.
With demand for cotton products weathering the economic recession as well or better than most consumer goods, reduction in world stocks of cotton over the past two years is likely to drive cotton prices up for the 2010 crop, according to Southeast Farm Press.
January cotton prices came in at 65.12 cents per pound, compared with 43.87 cents a year ago, according to the Lubbock Avalanche-Journal. And futures prices have soared past 80 cents a pound.
Southeastern cotton growers had a decent crop in 2009, but a good portion was lost to late-season rains.
Cotton growers from California to the Carolinas planted slightly more than 9 million acres in 2009, but as much a 15 percent of the crop was abandoned — in large part to record rainfall from the middle to traditional end point of cotton harvest in the Southeast and Mid-South, the publication added.
The inclement weather delayed harvest, making it difficult to determine total US production for 2009, but that number is expected to finish at around 12.5 million bales.
On a global basis cotton production is expected to be down almost 5 million bales. Small gains in production in South and Central America are more than offset by China’s decline in cotton production of over five percent, Farm Press reported.
“In addition to supply driven price improvement, the steady increase in cotton prices in 2009 are in part due to continued lowering of the US dollar value, a general upturn in the economy and tighter balance sheets by textile mills worldwide,” the publication added.