Cotton prices coupled with rising input costs and two years of drought will cause planted acres to drop about 1.5 million, down to 9.3 from 2007's 10.8 million acres, cotton analyst O.A. Cleveland says.
Most of those acres will come from the Southeast and the Mid-South, the cottonexperts.com analyst and Mississippi State University professor emeritus said during an interview at the Beltwide Cotton Conference in Nashville, Tenn.
"We can expect 80% of those acres to come from the Mid-South and Southeast," Cleveland predicts. "Texas will have more than half of the planted acres in the U.S."
Strong price predictions echoed throughout the three-day conference and Cleveland expects the same. He sees December futures in the mid- to high 70s and believes they could go higher than that. By the end of the 2008 marketing season, he says, cotton growers should be getting 80 cents and higher.
The market is trying to buy acres, Cleveland says.
However, he adds, "I don't believe with the planting season approaching rapidly that the market can move fast enough to get those growers that have alternatives.
Higher prices, however, will recover planted acres in cotton for the 2009 season, bringing the crop back to its 2007 level or higher, he says.
The decision to drop cotton in the Mid-South and Southeast largely is being driven by soybean prices. Growers can net $250 an acre on soybeans at $10 with $200 per acre production costs, Cleveland says.
The mitigating factor for acreage planting decisions is growers also worry about maintaining their cotton infrastructure.
"That will help cotton acres, but $10 and $12 soybeans are going to be the killer," he says.