COTTON ONCE AGAIN KING IN ALABAMA
Alabama farmers expect to plant more cotton and corn this year and less soybeans and peanuts, according to the Alabama Agricultural Statistics Service's prospective planting report.
The survey of about 1,000 farmers calls for a 21 percent increase in cotton acreage and an 8 percent reduction in peanuts, compared to last year. Houston County Farmers Federation President George Jeffcoat said record-high prices have made cotton a more attractive option for those who already own harvesting equipment.
"I'm down about 10 percent on peanuts and up about 15 percent on cotton," said Jeffcoat, who farms 2,500 acres in the Gordon community. "The price of cotton is as high as I've ever seen, and at these prices, cotton is the better option."
Jeffcoat noted that forward contracts for peanuts are running in the $550-$600 per ton range. But with some farmers contracting cotton at $1.25 a pound, Jeffcoat said one sample budget indicated peanuts would need to bring $750 a ton in order to compete.
Across Alabama, farmers are expected to plant 410,000 acres of cotton, up 70,000 acres from last year and the largest total acreage since 2006. Peanut acreage is expected to drop 15,000 acres to 175,000. Farmers also plan to grow fewer soybeans, down 40,000 acres to 310,000. Higher prices for corn, however, will increase plantings to 280,000 acres, up 10,000 acres or 4 percent. Meanwhile, farmers are hoping spring rains and favorable temperatures will lead to a bumper wheat harvest. Last fall, Alabama producers planted about 190,000 acres of wheat, up 40,000 acres or 27 percent from the previous year.
Cherokee County Farmers Federation President Robert Earl Acker said high prices have led to major changes on his farm this year.
"I've got 170 acres of wheat this year, and I didn't have any last year," Acker said. "I'm going to have about 1,100 acres of cotton this year, where I had about 1,100 acres of soybeans last year."
Acker also hopes to plant about 100 acres of corn and will follow his wheat with about 200 acres of soybeans. It's the high cotton price, however, that's having the biggest impact on farmers' decisions. In Cherokee County, most farmers are planting about 15 percent more cotton, he said, and it's hard to find a used cotton picker for sale.
"Cotton is back to where you can make a profit on it now," he said. "I've never sold cotton for more than a dollar (per pound) before, and I've already sold a good portion of this year's crop for over a dollar."
Optimism about cotton prices is having an impact on planting intentions across the South. Nationally, farmers expect to plant about 12.3 million acres of cotton, up 14 percent from 2010. Corn is set to top 92 million acres, up 5 percent, and wheat is expected to be up 10 percent to 41.2 million acres.
The report predicts total U.S. acreage for soybeans and peanuts will fall by 1 percent and 4 percent, respectively.
Tight global supplies and strong global demand are driving the shift in acreage, said Todd Davis, crops economist with the American Farm Bureau Federation.
"Uniformly throughout the South, cotton acreage increased," Davis said. "But in cotton, about 50 percent of our production, or planted acres, comes from Texas, so Texas is like our major league home run hitter. But if things don't pan out due to weather or other factors, that could be like our home run hitter striking out."
Currently a large part of Texas is rated as having moderate to severe drought.
"This will be of great concern if the dry weather persists into the growing season, Davis explained. "If Texas experiences cotton production problems this year, stocks will be tight."
Although farmers are glad to see the higher prices for their crops, they are quick to point out that production costs continue to skyrocket.
"I filled up my diesel fuel tanks at the end of February, and the price has gone up 40 to 50 cents a gallon since then," Jeffcoat said, adding that fuel prices are probably up at least $1 a gallon since last fall.
The costs of seed and fertilizer also are up. This has caused some farmers, like Acker, to hold off purchasing all of their production materials in advance. Persistently dry weather in Cherokee County since 2006 (except for the fall and winter of 2009-10) has left farmers in Acker's area strapped for cash.
"Last year, I barely made a bale of cotton per acre, and I averaged right at 15 bushels of soybeans per acre," Acker said. "I was hoping for two bales of cotton and 30 bushels of beans, so I basically made a half a crop, and you can feel it right now money wise."
Still, both Jeffcoat and Acker are optimistic that 2011 will be an historic year for Alabama farmers.
"It looks really good to me, even though the input (costs) are up," Jeffcoat said. "If we can make a crop and get the average rainfall, I think we can make some money this year on both cotton and peanuts. We've just got to be conservative.
"It looks better this year than it has in the past two or three years," Jeffcoat added. "When I've budgeted the last two or three years, if you could break even, you were doing well. This year, you can budget for a profit, if we don't have a drought."
Acker said the upturn in commodity prices has renewed his optimism.
"God gives us hope and faith," he said. "I have faith that it is our time to have a good crop, and I think He is going to come through for us."