The forecast is a turnaround for the U.S. cotton market and could boost global supplies of the fiber. Many U.S. cotton farmers last year opted to grow other crops such as corn and soybeans after cotton prices fell in 2011 and 2012. But this spring, U.S. farmers are set to plant more cotton than they did last year and reap a crop almost one-quarter larger than the previous harvest as farmers are hoping to benefit from prices that have gained more than 7% from a year ago, but the projected production increase from the world's biggest cotton exporter could turn around that price pick up.
Tom Lahey, a fourth-generation farmer in Moscow, Kan plans to plant 6,000 of his 14,000 acres with cotton, almost twice as much as last year, as the market for this next year is a big incentive for the raising of cotton.
In fact, this spring, U.S. growers will likely plant 11.26 million acres with cotton, an 8.2% increase from last year, and reap a crop of 16.37 million bales, more than 24% bigger than this season's.
The area planted in Kansas, Oklahoma and Texas, which account for more than half of U.S. cotton acreage, is expected to rise 12% from the previous year, the Nation Cotton Council said. About 1,000 farmers responded to the council's survey in December and January, from which the organization created its forecast for planted acreage.
Global production will likely rise as a result of more cotton from the U.S. and other major growers including Pakistan and Uzbekistan, the council said in a report. However, the group expects output from China and India, the two largest cotton growers, to fall.
World cotton production is projected to rise to 118 million bales in the 2014 crop year, which begins in July, a 200,000-bale increase over the previous season, the NCC said.
Still, many Northern Hemisphere producers base their decisions to plant on the December futures contract, which usually corresponds to cotton harvested in the fall. Cotton for delivery in December is trading about 10 cents lower than the March contract on ICE, so some farmers are hesitant to expand acreage.
The price of U.S. cotton traded on the ICE Futures U.S. exchange ended Friday at 87.47 cents a pound, compared with 81.40 cents a year ago.
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