Dec. 6 (Bloomberg) -- Cotton output in the U.S., the world’s largest exporter, may be limited next season as a La Nina weather pattern brings unusually dry conditions to the largest growing regions.
While planted acreage probably will to increase after prices surged to a record $1.5195 a pound last month, more fields will be abandoned by farmers as dry weather compounds already below-normal moisture from Texas to Alabama, said John Flanagan, the president of Flanagan Trading Corp. In the U.S., 11.04 million acres were sown this season, up 21 percent from a year earlier, the government said.
“We shouldn’t expect to see the crop emerge as healthy as this year,” Flanagan said by telephone from Fuquay-Varina, North Carolina. Plantings may reach 13.5 million acres next season, he said.
Rainfall is 27 percent below the five-year average since the end of August in Texas, the biggest producing state, and 43 percent less in Louisiana, CustomWeather Inc. data show. La Nina, a weather pattern caused by cooling equatorial waters in the Pacific Ocean, would mean more dry weather during planting, according to Commodity Weather Group LLC.
“There is a dryness risk in West Texas in the planting season” that will likely last into May, said Joel Widenor, Commodity Weather’s director of agricultural services in Bethesda, Maryland. The U.S. planting season usually runs from March through June. Crops in the Great Plains and Mississippi River Delta regions also may be hurt, he said.
Price Rally
Cotton prices are up 75 percent this year on ICE Futures U.S. in New York on concern that mounting demand in China would outpace shrinking global supplies, especially in the U.S. Cotton for March delivery rose the exchange limit for a third straight day on Dec. 3, closing at $1.3234.
Prices are up even as output is forecast to increase. World production will rise 9.2 percent to 27.3 million metric tons in the year that starts Aug. 1, compared with a 15 percent gain this year, the International Cotton Advisory Committee said on Dec. 1.
In the U.S., about 15 percent of next year’s planted acres will be abandoned because of the dry weather, Flanagan said. That would be up from the 2.4 percent that will go unharvested this year, the lowest rate since 1947, according to U.S. Department of Agriculture data. Abandonment averaged 12 percent over the past decade.
“Especially in Texas, they’re going to increase acres, but a good percentage of those acres are going to be dry-land acres, and they are subject to a higher abandonment rate,” Flanagan said.
‘Dried-Out Topsoils’
Farmers in Texas are finding “low-moisture conditions” and “dried-out topsoils” as they prepare for spring planting, Texas AgriLife, a unit of Texas A&M University in College Station, said in a Nov. 30 report.
A prolonged dry spell in 2007 led to a surge in cotton prices to a three-year high, after planting was disrupted in the southeastern U.S. Output that season fell 11 percent as farmers slashed acreage, according to the USDA.
Farmers “need some of those spring rains to get the crop emerged,” Widenor said in a telephone interview on Nov. 30.
As of the fourth week of November, rainfall in Texas totaled 7.95 inches (about 20 centimeters) since harvesting began at the end of August, down from the five-year average of 10.86 inches, according to data collected by San Francisco-based CustomWeather.
“If the U.S. does have a dry spring, then these markets will go crazy,” said Rogers Varner, the president of brokerage Varner Bros. in Cleveland, Mississippi. Cotton for delivery in December 2011 “ought to be pretty well supported,” he said.