Although cotton has posted an all-time high price of $2.27 per pound, once again as planting time approaches the weather will dog the 2011 production and the future market price.
"The market will be very sensitive to potential adverse weather conditions," said Dr. Carl Anderson, an economist and professor emeritus at Texas A&M University.
"Most of the United States 'Cotton Belt' is suffering from moderate to extreme drought conditions. In Texas, over 3 million dryland acres in the cotton regions are short to very short of moisture."
Anderson said the Texas cotton crop may be several million bales less than the 2010 harvested yield, which was 8.05 million bales.
"A good 2-3 inch rain right now wouldn't hurt a thing," said Rick Minzenmayer, an entomologist and cotton farmer at Hatchel, north of Ballinger and 40 miles northeast of San Angelo. "Drought conditions continue throughout West Central Texas."
There were 191,607 bales of cotton ginned with 187,048 bales produced in the 12-county Southern Rolling Plains region in 2010, said Randall Conner of Winters, executive director of the association. The harvested acreage was about 215,000 acres, resulting in an average yield of about 435 pounds per acre.
"That is about $90 million in economic value from cotton and cottonseed," Randall told me.
The Southern Rolling Plains region comprises Tom Green, Runnels, Concho, Coke, Coleman, Brown, McCulloch, Mason, Menard, Irion, Schleicher and southern Taylor counties.
On a jaunt through the farming belt east and south of San Angelo this week, I noticed most of the corn around Veribest has been planted. Corn farmers around Waco, where the majority of corn is produced, planted weeks ago.
There remains little field activity except for some producers applying herbicides. The warm and extremely dry and windy conditions continue to reduce soil moisture.
Also the potential for wildfires on rangeland continues to be a concern for ranchers.
Meanwhile, the Japanese earthquake and tsunami will have a minor effect on cotton prices, but could have a large effect on U.S. grain and beef exports, according to Dr. Mark Welch, AgriLife Extension Service economist at College Station.
"They buy a lot of wheat; they are our No. 1 buyer of corn, and we are a major contributor to their livestock industry. They are a big, big customer," Welch said.
He said the major port facilities are in the southern part of Japan and may have escaped the worst of the damage.
"If those facilities are still intact — in terms of just the logistics of getting in grain and other food supplies — it does not appear at this point that it's going to be a severe (long-term) limitation," Welch said. "We're still trying to get information, but port facilities will be a key factor."
According to the weekly crop and weather report issued by the AgriLife Extension Service, supplies for most grains are tight, including corn and soybeans, particularly for corn worldwide. Wheat prices soared after the drought in Russia last summer cut world wheat supplies. Prices from now until harvest will be driven by moisture and crop prospects in the U.S., Russia and other major exporting countries.
There was a time when Japan was a major customer of U.S. cotton. However, the textile industry in China has pretty much taken over that market.
"Japan is a major manufacturer of other goods, and there is likely to be a large ripple effect on the world economy," said Dr. John Robinson, Extension cotton marketing economist. "But the effects likely will be more on manufactured goods than agricultural."
Dr. Parr Rosson, also an agricultural economist specializing in international trade and marketing, believes the long-term impacts on U.S. exports will be different from the short-term.
"Near-term impacts will disrupt trade flows to and from Japan, resulting in lower U.S. exports of grains and oilseeds," Rosson said. "Intermediate to long-term impacts will likely result in more U.S. exports as Japan rebuilds critical infrastructure and resumes food production."
