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2008 cotton production forecast reduced on lower acreage
15
Jul '08
The U.S. cotton crop for the 2008/09 season was reduced 500,000 bales this month to 14 million, 27 percent below 2007/08 and the lowest, if realized, since the 1998 crop. The lower forecast resulted mainly from reduced area as reported in the June Acreage report. Also, a slightly higher abandonment was projected in July to reflect conditions to date in Texas. The national yield projection of 830 pounds per harvested acre was unchanged and is slightly below the 3-year average.

Based on the June Acreage report, U.S. producers indicated that they had planted 9.25 million acres to cotton, 1.5 percent below the March Prospective Plantings report and the lowest since 1983/84. While 2008/09 planted area is estimated about 1.5 million acres below 2007/08, harvested area is projected 2.4 million acres lower.

Conditions are less favorable in the Southwest this season, the region accounting for the majority of abandonment and where 55 percent of the total cotton area is expected in 2008/09, the largest share in 25 years. Nationally, the projected abandonment rate of 12 percent is above last season's 3 percent but below 2006/07's 17 percent.

Upland planted area is reduced across each region, however, the declines vary considerably. The reduction in the Delta of 790,000 acres is by far the largest year-to-year change. In fact, it is larger than the 701,000-acre decline expected for the other three regions combined.

The Delta region is forecast at about 2 million acres for 2008/09, the lowest since 1983, and is only slightly above the area expected in the Southeast. Upland area in the Southwest, at 4.9 million, is also the lowest in 25 years. In the West, the trend of lower acreage continues with upland area expected to fall below 300,000 acres in 2008/09. In addition, extra-long staple (ELS) plantings are forecast 90,000 acres lower than 2007/08 at 202,000 acres, the lowest in 5 years.

Meanwhile, 2008 cotton crop development is below both last season and the 5-year average according to the Crop Progress data as of early July. As of July 6th, 60 percent of the area was squaring, compared with 63 percent in 2007 and for the previous 5 years. Similarly, area setting bolls was reported at 15 percent, compared with 20 percent for the previous time periods.

Likewise, cotton crop conditions are currently below both last season and the 5-year average. As of July 6th, 45 percent of the U.S. area was rated “good” or “excellent,” while 19 percent was rated “poor” or “very poor.” In contrast, these ratings in 2007 were 55 and 15 percent, respectively.

U.S. Cotton Demand for 2008/09 Revised:
Demand for U.S. cotton was reduced 400,000 bales in July to 18.9 million bales, 400,000 bales above 2007/08. Exports were reduced 500,000 bales this month, the result of lower U.S. supply projections and lower import needs by China. Lower foreign mill use projections, mainly in China, India, and Turkey, resulted in weaker demand for imported cotton globally.

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