SPEARMAN, Texas – Tight supplies of corn, soybeans and wheat have sent prices skyrocketing in the last year, prompting worries of a looming global food crisis.
In other years, American farmers have responded to high prices by devoting more land to staple food crops.
But this spring, many farmers in southern states will be planting cotton in ground where they used to grow corn, soybeans or wheat – spurred on by cotton prices that have soared as clothing makers clamour for more and poor harvests crimp supply.
The result is an acreage war between rival commodities used to feed and clothe the world’s population.
“There’s a lot more money to be made in cotton right now,” said Ramon Vela, a farmer here in the Texas Panhandle, as he stood in the middle of a field where he grew wheat last year, its stubble now ploughed under to make way for cotton. Around the first week of May, Vela, 37, will plant 445 hectares of cotton, up from 85 hectares a year ago. “The prices are the big thing,” he said. “That’s the driving force.”
Economists, agricultural experts and government officials are predicting that many farmers, both in the United States and abroad, will join Vela this year in chasing the higher profits to be made in cotton – with consequences that could ripple across the globe.
“It’s good for the farmer, but from a humanitarian perspective it’s kind of scary,” said Webb Wallace, executive director of the Cotton and Grain Producers of the Lower Rio Grande Valley. “Those people in poor countries that have a hard time affording food, they’re going to be even less able to afford it now.”
Myriad factors determine food prices. Ethanol demand has pushed up corn prices. Wheat prices rose last year when Russia banned exports after drought devastated its crop.
Farmers typically respond by increasing plantings of the most profitable crop. In the middle of the last decade, as food prices began to rise, cotton prices remained low, prompting farmers to switch from cotton to grains and other food crops. When corn prices jumped with ethanol demand in 2007, farmers grew much more corn.
This year, cotton prices are the highest they have been in years, luring farmers despite strong prices for other crops.
The United States Department of Agriculture predicted in February that southern farmers this spring would plant 5.2 million hectares of upland cotton, the type that accounts for the vast majority of the crop. That is a 19 percent increase from last year, when farmers grew 4.4 million hectares. It also predicted that the acreage for corn and wheat would grow, although the increases would be lower than they might have been without the competition from cotton.
The effect of the cotton shift is expected to be magnified internationally, as farmers in other major cotton-producing countries, like Brazil, also respond to the high prices.
Cotton futures prices reached nearly $2.20 a pound in March on the ICE futures exchange in New York, up from $0.73
a pound last July. The price is expected to fall by harvest time, but farmers said they hoped to get close to $1 a pound.
In the United States, the economics of growing cotton vary according to many factors, including regional differences and whether or not the land is irrigated. Farmers in several southern states said that at a cotton price of about $1 a pound, their profit could be roughly $200 to $500 more per acre than they could earn growing corn or wheat. For 405 hectares planted in cotton, that means an additional $200,000 to $500,000 profit.
“It’s going to be cotton stalks everywhere,” said Travis Patterson, 44, a farmer near Spearman, who was irrigating one of his fields on a recent afternoon with help from his son Zane, 12, in preparation for planting cotton. “The landscape’s going to change,” he said, describing a countryside blanketed with the white of cotton rather than the more familiar green and gold of corn.
Patterson expects to plant 607 hectares of cotton this year, up from 600 last year. He said the frenzy was so intense that even cattle ranchers were talking about growing cotton. Farmers say they have no choice but to plant the crops that give them the best chance of making money. They face many uncertainties, and their profits can be wiped out by bad weather, rising costs for items like fertilizer, fuel or seed, or unstable crop prices, which can plummet as rapidly as they rise. The National Cotton Council expects substantial increases in all cotton-growing states, including large jumps in North Carolina, Mississippi and Tennessee. But Texas is the nation’s biggest cotton producer, and will have by far the biggest increase in acreage.
The shift is particularly noticeable in the Texas Panhandle, where cotton is a relative newcomer. Traditionally, the region was too far north and the growing season too short for cotton. But within the last decade, hardier varieties were introduced and slowly the crop caught on. One reason for its growing popularity is that it takes far less water to grow cotton than corn. Panhandle farmers tap into the Ogallala Aquifer, but that water source is being depleted and farmers face looming restrictions on water use.
So much cotton is going to be planted in the Panhandle this year – some counties expect at least double the acreage – that there has been talk of a shortage of seed for the most popular varieties.
“We’ve never seen anything like it,” said Leighton R. Stovall, the general manager of the Moore County Gin, north of Dumas, Texas, a facility that cleans and bales newly harvested cotton. Workers at the gin are finishing the foundation of a new building, part of a $6.5 million expansion that will double the facility’s capacity.
Stovall said the gin expected to clean cotton from 36,422 hectares this year, twice what it handled last year. He said about 40 farmers who had not planted cotton before had told the gin they would raise the crop this year, many more new growers than in previous years.