Cotton may be best bet to ease fears of crop slump

January 9, 2017 10:56:36 AM

Slim Smith - ssmith@cdispatch.com

 

While a study by the Mississippi State Extension Service forecasts a possible farm crisis for 2017, local farmers hold a more optimistic view, thanks to what they believe will be a strong cotton crop. 

 

While both commodity and input costs -- primarily seed costs -- have risen steadily over the early part of the decade, a decline in commodity prices since 2013 has not coincided with a comparable decline in those input costs, according to Bryan Parman, an agricultural economist for the Extension Service. 

 

"The year 2013 was the last year of relative high commodity prices," Parman said in the report. "Now, commodity prices have come down, but input costs have not come down nearly as fast. 

 

"We've had a couple years in a row now of negative returns for farmers," he said. "They've lost money per acre, especially those who are renting land." 

 

The prospects continue to be discouraging when it comes to soybeans, where prices have fallen dramatically over the past four years -- from $14.40 per bushel in 2013 to $9.25 last year. The current market price of $9.50, if it holds by the fall harvest, only slightly reverses that trend. 

 

 

 

The cotton comeback 

 

Meanwhile, both cotton (72 cents per pound) and corn ($3.40 per bushel) are at what farmers call decent, if not great, prices. 

 

That is something Noxubee County farmer Randy McGill has noticed, reducing his acreage of soybeans last year in favor of cotton. 

 

He intends to reduce his soybean acreage again this spring. 

 

"Last year, I put in about 450 acres in soybeans and 950 in cotton," McGill said Friday. "This year, I'll probably take the soybeans down to 300 acres and plant the rest in cotton. It's just the market price. Cotton is doing quite a bit better right now than soybeans." 

 

Cotton, once the No. 1 crop in the state, is third behind soybeans and corn. Cotton may be making a comeback in production if the Golden Triangle and surrounding area are any indication. 

 

"I'm sure there are a lot of farmers who are concerned about the prices, especially soybeans," said Aaron Litwiller, manager of the Bogue Chitto Cotton Gin in Brooksville. "In our area, cotton has been the bright spot. We've seen an increase of acreage of 15 to 20 percent. 

 

"We're still ginning cotton from the 2016 crop. In 2015, we ginned 65,000 bales," he added. "We've already ginned 70,000 bales (from the 2016 harvest) and (there's) more to gin. It looks like we'll gin 94,500 bales when we're finished." 

 

Cotton and corn not only appear to have more favorable market prices, but those input costs are lower, too, according the Extension Service report. The report estimates input costs for cotton and corn at $79 per acre, while soybean input costs are estimated at $117 per acre. 

 

David Johnson, who farms 650 acres in Noxubee County, said he plans to divide his acreage equally between corn and cotton. 

 

"We had a really good cotton group (in 2016)," Johnson said. "The corn crop was only fair, although the irrigated corn did pretty well." 

 

 

 

Drought effects 

 

Johnson irrigates about a third of his acreage, which points to a concern farmers say is potentially as serious as crop prices. 

 

The drought that began last fall has continued into winter, which means ponds farmers use to irrigate their crops are far below normal. 

 

"I've got 2,400 acres and about 1,500 of that is irrigated," McGill said. "So that's a big issue for me. I'd say, right now, the water level in those ponds is way under 50 percent. We need some rain this winter." 

 

It's much the same for Johnson. 

 

"Our ponds are very low," he said. "If the winter continues to be dry, there's going to be some farmers that are going to be in trouble."

Slim Smith is a columnist and feature writer for The Dispatch. His email address is ssmith@cdispatch.com.