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Cotton looking good, but prices are too low
MISSISSIPPI STATE -- Mississippi’s small cotton crop was looking good by late August, but with prices below break-even levels, producers will hold their breath until harvests are in.
John Michael Riley, Extension agricultural economist, said cotton harvest cash prices in Mississippi in mid-August were about 53-55 cents a pound. MSU crop budget estimators indicate the “average Mississippi producer” needs prices above 62 cents a pound to be in the black in 2009.
“Last year we were in a downward spiral coming off cotton prices of 80 cents a pound,” Riley said. “Eventually, Mississippi cash prices were around 37 cents a pound at harvest. The five-year average price is 47 cents, so we’re a little bit above that right now, and the futures market says we should stay in the 50-55 cents per pound range through harvest.”
Cotton prices responded to the general economy and dropped from 65 cents a pound when the Dow Jones Industrial Average took a hit Aug. 17.
“Cotton historically is more responsive to moves in the general economy than corn or cattle because clothing is more a leisure purchase than food,” Riley said. “Until the economy improves and maintains more consistent strength, cotton will be hard pressed to stay above 60 cents a pound.”
But if the crop is harvested late as expected, it will increase the risk of cotton being left in the field or damaged and not harvested. If this happens, prices will go up.
Darrin Dodds, cotton specialist with the Mississippi State University Extension Service, said the crop will finish late because spring rain pushed planting two to three weeks later than normal.
“Producers may harvest toward the third week of September instead of early September like usual,” Dodds said. “Harvest probably won’t be finished until late October or mid-November.”
The longer the crop stays in the field, the longer it is exposed to hurricanes and tropical weather, which tend to plague the state in late summer.
“Last year, some places got 30 inches of rain in six weeks. Parts of the crop were under water and lost, and others with less rain still had problems with hard-lock and boll rot,” Dodds said. “If we get similar weather this year, it will come when our crop is vulnerable to these problems again.”
Weather to date has not been too rough on cotton. The crop survived the 10-day stretch in late May and early June when the weather went from cool and moist to hot and dry.
“June turned out to be abnormally hot and dry, and a lot of places caught no rain or very little that month,” Dodds said. “We started picking up some rains in late July, and the heat was more temperate. August has warmed up some, but we’ve also picked up some rain, which we were fortunate to get.”
Dodds said because the crop was planted late, flowers on the plant in the last two weeks of August will probably not make it into the picker.
“It takes about 850 heat units to mature a boll. We’re starting to get to the point where we may not get enough heat units to make that happen,” Dodds said.
Cotton producers are hoping for warm temperatures and no hurricanes or extended periods of rainy weather from now until harvest.
Angus Catchot, Extension cotton entomologist, said plant bugs have been a big problem for cotton in the Delta.
“The northwest Delta has been our stronghold for cotton as the acres have decreased the past few years,” Catchot said. “They have really battled plant bugs this year, and a lot of fields where the plant bugs have been the worst have required treatments every five to six days.”
Catchot said the other insect pests have been boll worms and spider mites.
“This has been a very high boll worm year for us,” Catchot said. “Their numbers are tied to the number of corn acres, because corn is a major host for boll worms.”
Producers had to treat a significant number of acres in June and July for spider mites, but Catchot said the recent rainy cycle helped get this pest under control. All the pest treatments have driven up the cost of cotton production, and cotton prices have not left much room for profit.