Upland cotton intentions are 9.9 million acres, an increase of 10% from ’09, while extra long staple (ELS) intentions of 176,000 acres represent a 24% rise. The results were announced at the NCC’s ’10 Annual Meeting today in Memphis. 

Assuming an average abandonment rate of 11.5%, total upland and ELS harvested area would be about 8.9 million acres. Applying state-level yield assumptions to projected harvested acres generates a cotton crop of 15.5 million bales, compared to ’09’s total production of 12.4 million bales. Assuming average seed-to-lint ratios, ’10 cottonseed production is projected at 5.2 million tons, up 1 million from last year’s 4.2 million tons.

The NCC survey was mailed in mid-December of ’09 to producers across the 17-state Cotton Belt. Survey responses were collected via return mail and electronically through mid-January asking for their intended acreage for ’10 and their plantings in ’09.

Based on survey results, all four production regions show intended upland cotton planting increases from last year. The West shows the largest percentage expansion of 26.6%; however, the largest acreage increase is in the Southwest at 475,000 or up 9.1%. The two other regions, the Southeast and the Mid-South, indicate rises of 12.2% and 8.4%, respectively.

NCC Senior Economist Dale Cougot emphasized that, “prevailing market conditions this year are more favorable for cotton prices than some of the main competing crops versus the previous couple of years. Part of this is due to further tightening of world and US cotton supplies, while other competing crops experience a reduction of pressure on their supplies from either higher production or lower demand. It is still early to fully evaluate the impact of weather, ground moisture and water availability, but most of the Cotton Belt at this point is better off than in the last several years -- which may alleviate some of the drag on acres and yields. At this time, planting seeds are still in the sack and growers will continue to monitor market conditions comparing relative crop prices and cost in the coming weeks that could alter their final decision.”

Survey respondents throughout the Southeast indicated expansion in acreage, except for Florida, as producers move to peanuts. Alabama and North Carolina reported the largest percentage increase at 20% for both with shifts coming from reductions in corn and soybeans. Growers in South Carolina, at 13%, and Virginia, at 10%, look to increase acres, mainly at the expense of soybeans, while Georgia, at 9%, is taking acres from corn. 

All the Mid-South states intend to expand cotton acres. However, the magnitude varies from a modest 0.4% in Arkansas to 19% in Mississippi, followed closely by Tennessee at 18%, Missouri at 8% and Louisiana, which is adding 1%. Missouri growers’ expansion is at the expense of corn, whereas Louisiana and Mississippi producers noted both corn and soybeans.  Tennessee and Arkansas acres are the results of cotton following acres that were devoted to wheat and soybeans double cropping in ’09.

Southwest growers expressed intentions of expanding the largest area by 475,000 acres to 5.7 million acres. A large part of the growth came from the subsiding drought in Texas (+8.3%), while Kansas’ (+19.0%) and Oklahoma’s (+26.3%) propose shifts away from wheat.

 All of the Western region states showed upland planting increases, with the region projected to advance by 27%. California’s upland planted area intentions of 37% breaks a five-year declining trend for that state and -- represents the largest percentage growth of all Cotton Belt states. Survey responses also revealed enhancements in Arizona (+20%) and New Mexico (+32%) upland area.

Increases in the four states producing ELS cotton are coming in response to better Pima prices, which are finding support in strong export demand and tighter stocks. California leads the way with an increase of 28%, while Texas (+7%), Arizona (+5%) and New Mexico (+4%) reported smaller gains.

NCC Chairman Jay Hardwick said, “The President’s proposal on phasing down direct payments and limiting total payments affects the farms that produce more than three-fourths of all agricultural products marketed in the United States. The safety net for America’s farm families must be maintained. Congress spoke clearly to ensure sound agricultural policy that is fiscally responsible in the passage of the last farm law. Direct payments are compliant with the direction being taken in the World Trade Organization to reduce trade distorting support. The financing demands of commercial agriculture require a high level confidence by lenders in program availability. In the midst of a credit crisis, it makes no sense to threaten a vital component of the borrower’s cash flow.”

The ’08 farm law includes provisions for the Commodity Credit Corp. (CCC) to pay a portion of the storage costs during periods of low prices. These provisions’ costs were completely offset by changes in the upland cotton counter-cyclical target price.

The NCC emphasized that the Administration’s proposal to eliminate the upland cotton storage credits is a failure to discern critical differences between commodities.

“Baled upland cotton lint is an identity-preserved commodity that requires off-farm storage in facilities approved by CCC while under loan,” Hardwick said. “Further, loan eligible cotton must comply with a number of CCC regulations stipulating bale wrapping and packaging.”

The NCC also is puzzled by the proposed reduction in Market Access Program (MAP) funding.

The letter references the difficulties that US firms are experiencing obtaining adequate and affordable credit necessary to operate their facilities and export yarn and fabric to customers in the CAFTA and Andean region. It also asks for information on the bank’s activities in the textile sector to date and if any additional legislative authority is required to develop effective programs.

Textile and apparel firms have faced a long-term credit crisis that worsened as the global economy faltered and consumer demand fell. Exports from the United States fell 18% in the first 11 months of ’09, according to the Commerce Dept.’s Office of Textiles & Apparel. At the same time, competitors in India, China and Pakistan reportedly have access to credit from their governments to ensure they do not lose market share.

The NCC and National Council of Textile Organizations have worked closely since mid-’09 in an effort to urge EX-IM and the Small Business Administration to make modifications in their credit guarantee programs so they can be better utilized by the textile industry.

Sens. Hagan and Kerry, both members of the Small Business Committee, have expressed interest and concern about the lack of credit available to small and medium manufacturers. USTR officials also have been working closely with EX-IM and the private sector in an effort to develop programs to assist manufacturers.

The NCC and NCTO will continue to work with relevant agencies and members of Congress in an effort to promote programs that can be utilized by US spinners to facilitate their export business.

Peterson said the bill is needed to prevent the agency from usurping the right of Congress to make environmental policy on global warming issues. The bill also would advance several of the farm state lawmakers' other priorities by stopping EPA from calculating “indirect” land-use changes in foreign countries for determining US renewable fuels policy, and broadening the definition of renewable biomass.

The ’07 energy law expanded the renewable fuel standards and increased goals for the use of ethanol and other biofuels in US transportation fuels, reaching 36 billion gallons a year in ’22. The standard requires EPA to assess the "lifecycle" emissions of biofuels which includes the emissions from growing crops, producing fuels made from them, and distributing and using the fuels.

EPA proposed last year to measure emissions from indirect land-use changes associated with biofuels, such as land that is deforested in other countries because of increased crop growth in the U.S. The agency concluded that traditional corn ethanol could have a slightly larger emissions footprint than gasoline when land-use changes are factored in. Those draft regulations angered biofuels advocates and farm-state lawmakers, including Peterson and Emerson, who maintained that agency was unfair to ethanol.