Cotton output in West Texas, the top producing U.S. region, will jump at least 40 percent this year and may double if precipitation increases, said Darren Hudson, director of Texas Tech University's Cotton Economics Research Institute.

"We're looking at a crop between 2.8 million and 3.2 million bales," Hudson said Monday. "If we get good rains in the next few weeks, production could go back to 4 million bales."

Last year, the most severe drought in at least a century decimated the West Texas crop. Output fell to 2 million bales, compared with an average of 4.5 million in the past 10 years, said Hudson, a cotton analyst for 12 years. A bale weighs 480 pounds.

Cotton futures in New York have plunged 69 percent to 67.1 cents a pound from a record $2.197 in March 2011 as global demand waned. Output in the U.S., the world's biggest exporter, may climb 9.2 percent to 17 million bales in the season that starts Aug. 1 from a year earlier as acreage increases, the government said earlier.

"With prices at these levels, farmers will probably lose money," said Alan Underwood, the president of Underwood Cotton Co. in Lubbock. "They probably will turn to government loans and store the cotton, waiting for prices to rebound."

Production costs in West Texas indicate break-even prices at 88 cents to 90 cents a pound, he said.

"We got off to an average start in terms of plantings, but still need the rains to keep the dryland-cotton crop growing," Underwood said.

An estimated 54 percent of the crop in the top 15 producing states was good or excellent, compared with 57 percent a week earlier, the U.S. Department of Agriculture said Monday.