Interviews
Cotton forecast & caveats of 2007-08
16 Jan '07
3 min read
The counter forces to the economic incentive discussed above include growers who have recent investments in cotton harvest equipment or ginning/warehousing operations. In some cases landlords may constrain the amount of "cotton ground" that is shifted to feed grains and oilseeds. In addition, some cotton growers may be reluctant to reduce acres significantly prior to the next farm bill, on the assumption that having recent cotton planting history may be beneficial.
I am assuming that these constraints are reflected by historical plantings, and then select the lowest planted cotton acres (13.4 million) in the last ten years as a tentative forecast of next year's plantings. The first survey-based planted acres estimates will start appearing in the first quarter of 2007, culminating in the USDA Planted Acres Report on March 31, 2007.
Potential yield is another important caveat. The U.S. all cotton yield of 819 pounds per acre in 2006 strikes me as remarkable given the widespread hot and dry growing conditions.
I am approaching this by assuming the ten year low for planted acres (13.4 million) and only a two year average yield (i.e., equally weighting the exceptional growing conditions in 2005 with the harsh conditions of 2006).
The third major caveat is U.S. exports in 2007/08. I am assuming only a small improvement over 2006/07 at 16 million statistical bales.
I am assuming that these constraints are reflected by historical plantings, and then select the lowest planted cotton acres (13.4 million) in the last ten years as a tentative forecast of next year's plantings. The first survey-based planted acres estimates will start appearing in the first quarter of 2007, culminating in the USDA Planted Acres Report on March 31, 2007.
Potential yield is another important caveat. The U.S. all cotton yield of 819 pounds per acre in 2006 strikes me as remarkable given the widespread hot and dry growing conditions.
I am approaching this by assuming the ten year low for planted acres (13.4 million) and only a two year average yield (i.e., equally weighting the exceptional growing conditions in 2005 with the harsh conditions of 2006).
The third major caveat is U.S. exports in 2007/08. I am assuming only a small improvement over 2006/07 at 16 million statistical bales.
Texas A&M University
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