In some cases, prices had to come down last year to force China's hand.
Cotton is now in the 80-cent range. "Opportunity knocks and you better answer," Nicosia says. "This is an opportunity to grow cotton. If you don't, someone else will."
With average yields of 1,000 pounds per acre in Arkansas and Missouri, cotton is the most profitable crop to grow in the mid- to upper-80s for the first time in the Delta, Nicosia says.
The net profit per acre calls for growers to plant more cotton, Nicosia says.
Net profit per acre for irrigated cotton is expected at $406 in Arkansas; corn, $388; soybeans, $394; and sorghum, $183.
In the long run, "the market outlook depends on China," Nicosia says. Some 113 to 117 million bales will be produced globally in 2013. "As long as China will soak up the surplus, prices will stay the same until China changes it policy."
In effect, China's reserve policy is the current policy for the global cotton industry. "It has the potential to change the U.S. balance sheet in either direction—either a surplus or a deficit. Take the opportunity while it's there."
Without China, U.S. cotton exports would have been 5.3 million bales last year and not the 6.4 that it was. The U.S. exports 11.7 million bales of cotton.