How drought, cattle, and Crimea affect Texas cotton farming

Mar 26, 2014

Credit debicates.blogspot.com

Farmers across the high plains are faced with planting choices every year.  This year Texas farmers are wondering if corn, cotton, or sorghum will make the most money according to StateImpact Texas

Gaylon Morgan is a cotton specialist at Texas A&M.  He says, “I think we’ll see an increase in cotton, just due to the price difference.  It’s just supply and demand.”

Grain and corn prices are down.  Cotton is up.

Why are grain and corn prices down?

It’s complicated, but there are two main reasons.

Drought. 

John Robinson is a professor in cotton marketing, also at Texas A&M.

“If you look at a drought monitor map in the places that are most important for growing cotton and grains, it’s pretty dry there,” says Robinson.  “From an economic return standpoint. If you’re going to have a reduced yield due to drought. Cotton is the better crop to have.”

Supply and Demand.

The demand for corn is slowing, yet yields in the Midwest were high last year. 

“If you pencil it out, with the projected demand we have and the projected supply we have then we’d have more than enough corn,” says Robinson.

Robinson also says the decline in number of livestock has also reduced the need for corn and grain.

Mark Welch is an associate professor and extension economist in grain marketing at Texas A&M.  He disagrees.  Welch thinks farmers might still put their bets on corn and grain.  The main reason is the situation in Ukraine.

Ukraine is the bread basket of Europe.  With the Russian annexation of Crimea, the uncertainty has spurred a fear there may be a global shortage of grain, and that has started to drive prices back up in the U.S.