Dec. 18, 2020
YEAREND: Rain eclipses record potential for cotton, yet 2020 ends with in market recovery
By Mary Hightower
U of A System Division of Agriculture
- Wet, cool spring gave 2020 cotton slow start
- Mid-season showed potential for record yields
- Hurricane remnants, constant rain bogged harvest
(Download this story in MS Word format here.)
JONESBORO, Ark. — Arkansas’ cotton crop got off to a slow, cool and wet start, endured a pandemic and the remains of two hurricanes, hinted at record yields and inexplicably ended the season with prices hitting a high note.
“By May 18, only 47 percent of the crop had been planted,” Scott Stiles, extension economist for the University of Arkansas System Division of Agriculture, said. “Another way to say this is: half the crop was planted past the optimal cut-off date.”
Planting progress continued to lag behind the five-year average almost until mid-June.
Could 2020 have been great?
By mid-season, conditions proved to be very agreeable for cotton.
“In August we had the potential for a great crop statewide,” Bill Robertson, extension cotton agronomist for the Division of Agriculture, said. “The August National Agricultural Statistics Service estimate of 1,200 pounds of lint per acre and represented a new all-time high, we likely could have been on track for better than 1,300 pounds.”
“Oddly enough, NASS has stuck with its record 1,200-pound-per-acre yield projection for three straight months,” Stiles said. “This is likely an accurate assessment of the crop, but also a hint that the crop would have been better than 1,200 pounds had it not been so impacted by weather. Maybe it was a 1,300- to 1,350-pound crop? We’ll never know how good it truly was.”
Throughout the 2020 hurricane season, the Atlantic Basin churned out a record number of named storms. The remnants of Hurricane Laura arrived in Arkansas at the end of August. And more rain followed.
“Total September and October rainfall at Marianna was 10.44 inches,” Stiles said. “That delayed harvest and reduced yield and quality.”
Both Stiles and Robertson said delayed planting and frequent rain in October pushed a third of this year’s harvest into November.
“Tropical Storm Delta moved in the state Oct.10. After that, a pattern of rain every three to four days set in for the balance of the month,” Stiles said.
The constant rain caused “harvest delays during our prime picking windows, which hurt us with direct yield and quality losses but extended our harvest period well past our target completion date of Nov. 1,” Robertson said, adding that he finished his variety plot harvest Nov. 23.
The rain and wind caused quality loss in the cotton lint in terms of color and leaf content. Stiles said the quality difference alone in the 2019 and 2020 crops is $23 to $24 per acre, assuming the average 1200-pound-per-acre yield.
Rain wasn’t the only problem cotton growers faced.
“Pigweed and plant bugs are our big pests,” Robertson said. “The loss of effectiveness of two-gene Bt varieties, especially in south Arkansas for worm management, are a big concern. New three-gene Bt varieties with very good yield potentials will be commercially available in 2021 and bring some relief from worms.
Bt cotton is engineered to resist bollworms.
“Weed control, especially Palmer pigweed, is our big thorn in our side,” he said. “With our current tools in Arkansas, weed control was not cheap or easy in 2020.”
He said that most growers “have plans for 2021 well in motion and hope these results can help with transition from two-gene Bt varieties to the new three-gene Bt varieties.”
County variety test results are available at https://aaes.uark.edu/variety-testing/.
The COVID-19 pandemic turned into a double whammy for the cotton industry. COVID-19 travel restrictions caused either delays or cancellations in getting foreign workers to the United States.
“Many operations in the Delta are using the H-2A guest worker program to source employees from Mexico, Romania and South Africa,” Stiles said. “This may be an issue again in spring 2021.”
As the pandemic sent the workforce home, clothing sales plummeted, rippling backward into the textile supply.
“A slowdown in economic activity and consumer spending as a result of COVID-19 took cotton prices sharply lower throughout the first quarter of 2020,” Stiles said. And while analysts debated whether an economic recovery would be “L-shaped,” “U-shaped” or “V-shaped,” cotton went with the letter V.
“Cotton started the year with a high of 73 cents in January, then crashed down to an 11-year low of 50.18 in early April,” Stiles said. “And then almost made it back to the January high by Oct. 28 — peaking at 72.60.”
“The likely explanation behind cotton’s price recovery is something less related to pure supply/demand fundamentals and more related to speculative money flows,” he said. “An influx of speculative/managed money took up ‘long’ or ‘buy’ positions in the cotton market at the exact time it was trading at 11-year lows.”
Arkansas cotton producers did get help from the government, as of Dec. 13, receiving $18.1 million from the second round of the Coronavirus Food Assistance Program. That amount is likely to climb since the deadline for growers to sign up for this second round was Dec. 11.
Find Division of Agriculture analysis of COVID and its economic impacts here: https://bit.ly/COVIDArkImpacts.
Looking to 2021
Cotton acres may slide in 2021 as healthy soybean, corn and wheat prices draw growers away.
“U.S. and world supplies of corn and soybeans tightened significantly over the last few months,” Stiles said. “Prices for both crops have shot higher. Wheat prices have been attractive as well this fall, offering growers opportunities to forward price at $6 or better. We expect wheat acres to be up sharply.
“A combination of factors will no doubt reduce cotton acres in 2021 especially if cotton prices stay near or below current level at 70 cents,” Stiles said.
Robertson said that “while cotton acres are fairly stable in Arkansas with gin-owned land and producers locked into picker payments, we could see a 15 percent to 20 percent decline in acres.
“I have heard some predictions as low as a 10 percent decline and some as high as 30 percent, he said. “With extremely good corn or soybean prices, producers have been known to keep the pickers in the shed.”
To learn more about cotton production, contact your county extension office.
Follow Arkansas extension on Twitter, Facebook and Instagram at @uaex_edu and the Division of Agriculture on Twitter at @AgInArk and @ArkAgResearch.
About the Division of Agriculture
The University of Arkansas System Division of Agriculture’s mission is to strengthen agriculture, communities, and families by connecting trusted research to the adoption of best practices. Through the Agricultural Experiment Station and the Cooperative Extension Service, the Division of Agriculture conducts research and extension work within the nation’s historic land grant education system.
The Division of Agriculture is one of 20 entities within the University of Arkansas System. It has offices in all 75 counties in Arkansas and faculty on five system campuses.
The University of Arkansas System Division of Agriculture offers all its Extension and Research programs and services without regard to race, color, sex, gender identity, sexual orientation, national origin, religion, age, disability, marital or veteran status, genetic information, or any other legally protected status, and is an Affirmative Action/Equal Opportunity Employer.
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Media Contact: Mary Hightower
Chief Communications Officer
University of Arkansas System Division of Agriculture