--Monsanto, Bayer CropScience plan more drought-tolerant cotton seeds in about a decade.

--Cotton demand is growing, driving prices to historic highs.

--Other nations are researching drought-tolerant cotton seeds.

NEW YORK (Dow Jones)--As West Texas cotton farmers seek relief from one of the state's most severe droughts on record, seed makers say they are years away from producing genetically-modified seeds that can thrive in dry soil.

U.S. seed giant Monsanto Co. (MON) and Bayer CropScience, a unit of Germany's Bayer AG (BAYRY, BAYN.XE), are planning to roll out a line of more drought-tolerant seeds in about a decade, company executives said. Representatives for Dow Chemical Company (DOW) and DuPont's (DD) seed business, Pioneer Hi-Bred, said the companies are also focusing on drought tolerance in its cotton-breeding program but didn't say when the seeds would be available.

"Environmental stresses, including variability in weather like we've seen in areas this season, are one of the biggest risk factors farmers face," said David Fischhoff, Monsanto's vice president of technology strategy and development.

Bayer CropScience said it is working with cross-breeding and genetic modification for a seed that could withstand some drought, and that it will take about 10 years before the seeds hit the market.

West Texas, with its naturally dry soil and high risk for drought, makes it an ideal place to market such seeds. Global demand for cotton is growing, driving prices up to historic highs, but West Texas farmers aren't able to ramp up production fast enough and cash in because of their arid land.

"Water is the most limiting factor we have on yields," said Steve Verrett, vice president of the Plains Cotton Growers Inc., a trade group representing farmers in the high plains of Texas, where most of the state's cotton is grown.

He said the region needs "some kind of miracle" to produce a strong crop this year, such as "four inches of rain" this week, as farmers wrap up planting. Texas has been mired in drought since October. Rainfall in West Texas this year is a quarter of the 30-year average, according to National Drought Mitigation Center at the University of Nebraska-Lincoln. Last week, the U.S. Department of Agriculture said the country's 2011-12 crop would likely be 1 million bales, or 5%, lower than previously expected, because of the drought.

But Verrett is skeptical of whether a more drought-tolerant seed could still sprout during a drought of this magnitude.

"When it never rains, I don't care what kind of gene you got in there," he said. "It can't make something out of nothing."

The companies say the improved seeds will need some water to thrive.

West Texas accounts for more than one-third of cotton production in the U.S., the world's largest exporter of the fiber. The National Oceanic and Atmospheric Administration said May, the height of the planting season, was one of the driest on record for Texas.

Researchers in major cotton-growing nations such as China and India are also working on drought-resistant seeds, said Tariq Chaudhry, who heads the technical information department at the Washington-based International Cotton Advisory Committee, a group that advises cotton-growing nations.

Chaudhry, who has studied cotton for more than three decades, expects the drought-tolerant seeds to hit the marketplace in less than a decade because of growing global demand, especially since just less than half of the world's cotton is grown using only rainwater, as opposed to cotton irrigated by farmers. "Cotton has a future," he said.

Cotton for July delivery on IntercontinentalExchange was trading 2.5% higher on the day at $1.5478 a pound.