The National Cotton Council's (NCC) 44th Annual Early Season Planting Intentions Survey noted cotton acres are expected to fall in 2025 to 9.6 million this spring, down 14.5% from 2024. Lower cotton acres could signal that corn acres will pick up the slack.
Louis Barbera, VLM Commodities LTD, told me, "The acres report by the NCC was a bit of a surprise from the survey but maybe not all that far off from what people would expect finals to look like given prices. The muted reaction from the market more likely has to do with the grower position being so massive. The unfixed grower has never been this large for this time of year. There is literally no reference for how large the on-call portion is for unfixed growers." Here is a link to the Feb. 20 CFTC Cotton-on-call report: https://www.cftc.gov/… .
Barbera added, "It is our contention that if prices for new-crop cotton stay at sub-72 cents and corn continues this trajectory, that acres outside the southwest will shift further. We do believe that this year the Texas acres will be slightly bigger than the survey just from lack of options Lubbock South. We believe that Georgia acres were probably a touch low, but Delta and rest of Southeast can fall further. We believe that acres could fall below the 9.55 million NCC survey if prices do not significantly recover by April."
Tom Christiansen, Foresight Brokerage told me, "Cotton insurance price is sitting at 69 cents per pound, well below the cost of production closer to 80 cents. So, it's no surprise we are losing acres. Cost to grow cotton has exploded on farmers over the past few years and is above the cost to grow corn. There will be a percentage of farmers that will not get financed to grow cotton (more downward pressure on acres).
"The acres we are losing will go mostly to corn especially since everyone in the South has a positive corn basis. A distant second will be milo, beans and peanuts. The NCC did a good job capturing most of the acre loss (1.625 million) and the locations, at this point I think they are still too high."
Christiansen added, "My current estimate is closer to 2 million acres lost and the next 30 days will tell us more. If the current spread between Dec cotton and Dec corn were to widen, we could lose 2.5 million acres. USDA typically does a terrible job estimating cotton acres because their sample size is so small (poor farmer participation rates). So they may come in at 1.5 million lost and be forced to lower that later into the summer."
COBANK 2025 ACRES PROJECTION
In a Feb. 20 Spring Acreage Outlook published on their website, CoBank said, "Cotton acres are forecast to fall 7.8% year-over-year to 10.3 million with cotton prices continuing to struggle under the weight of a slowing global economy, growing concern over the Chinese economy, a strong U.S. dollar, and continued growth in competition from Brazil. The shift of cotton acres to corn will likely be greater in the Southeast than in the Texas Plains. Texas cotton producers shifted acres to wheat and other fall forages for grazing cattle, which are currently trading at record high prices."
CoBank added, "U.S. corn planted acreage is projected to be 94.55 million, up 4.2% year-over-year, with corn harvested for grain acreage up 5% year-over-year. Meanwhile, harvested acreage for corn silage is seen falling 8.2% year-over-year to 5.6 million.
"While farmers tend to stick to historical crop rotations for agronomic reasons and market diversification, corn's price rally against soybeans, spring wheat, cotton and grain sorghum suggests a major shift in acres is in the offing."
Link to CoBank spring acreage outlook: https://www.cobank.com/… .
Link to NCC survey: https://www.cotton.org/… .
Mary Kennedy can be reached at Mary.Kennedy@dtn.com
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