(Bloomberg) -- The weather this spring has been rough across the U.S. agriculture belt, and cotton farmers may have had some of the worst of it.
Both the top-two producing states in the U.S. are being affected by adverse -- but differing -- weather conditions. That’s left planting across the South behind for this time of the year. What’s more, a rally in corn means some farmers may be driven to switch to the grain and limit the acres allotted to cotton.
Rains have ravaged Missouri, Kansas, Arkansas, Oklahoma and parts of Texas, the No. 1 U.S. cotton producer. Meanwhile, the area considered abnormally dry in Georgia -- the second-largest producing state -- jumped to 92% from 68% last week, according to the U.S. Drought Monitor. Through May 26, about 57% of the crop has been planted, down from 61% a year ago, government data show.
The weather delays mean that even an upcoming benchmark U.S. Department of Agriculture assessment may not be the last word for cotton plantings, according to John R. Robinson, a professor at Texas A&M University. The USDA is scheduled to issue its planted-acreage report on June 28. Earlier this season, signs were pointing to American cotton production rebounding this year.
“Uncertainty of the production question will be extended all summer,” Robinson said in an email. “More uncertainty equals more potential price volatility.”
While the national planting pace is behind, it’s less so than prior weeks. Seeds may have a hard time germinating in dry soil in the Southeast including Georgia, even though planting is ahead of last year in the state. Rain has prevented growers from getting into fields in states including Oklahoma.
Price Slump
Meanwhile, farmers are also contending with a nearly 10% slump in cotton prices during the last month as hopes for increasing exports to China have dimmed due to escalating trade tensions between Beijing and Washington.
“2019 cotton planting weather in the southern Great Plains including the Texas High Plains is much more adverse than normal years,” Jourdan M. Bell, an assistant professor and agronomist for Texas A&M in Amarillo, said in an email. While most growers plan to stick with cotton, a few are seeking alternatives, she said.
The cool, wet spring across Texas, Oklahoma and Kansas has raised the most concern for cotton, said Joel Widenor, director of agricultural services at Commodity Weather Group LLC in Bethesda, Maryland.
“Usually, cotton doesn’t like cool and wet on the front end of the season,” Widenor said in a telephone interview. Another potential problem for farmers is flooding that has spread across the Mississippi River Delta and its many tributaries through the region, he said.
“They have all this water that they are trying to figure out how to deal with,” he said.
Given all the challenges, farmers may consider switching some acres to corn this year and start thinking about planting less cotton next year if they locked in future prices for the grain, according to Jeff Lander, owner of Lander Ag Services in Suffolk, Virginia. Corn futures in Chicago have rallied 24% in the last 2 1/2 weeks.
“If corn continues to stay here, we are probably setting up to lose cotton acres for 2020,” he said.
