Global Market Cuts Into Local Cotton

Supply and demand economics have indisputably affected the state’s cotton crop in the past decade.

World stocks, driven by hoarding in China, have increased. That has kept global prices from rising in step with input costs. Thus, the former Arkansas staple has fallen out of favor with producers, and the numbers tell that tale.

In 2004, the state’s cotton farmers — mostly in the Delta but with some pockets in southeast Arkansas and even a spot or two in state’s southwest corner — planted 910,000 acres, according to the National Cotton Council of America. By 2009, that number had fallen to 520,000 acres.

Now, fewer than 300,000 acres of cotton will dot the Arkansas landscape.

Production has followed the cut in acreage. The state’s farmers produced almost 2.1 million bales in 2004. By 2013, that number had fallen to 720,000.

Look no further than global stocks of cotton to explain that dynamic.

In the 2013-2014 growing year, global stocks of cotton began the year at 89.97 million bales (480-pound). The year ended with 101.66 million bales available.

Compare that number to the 2009-2010 growing year. Beginning stocks were 61.96 million bales, and ending stocks were 47.05 million bales. In 2004-2005, beginning stocks were 48.23 million bales, and ending stocks were 60.68 million bales.

In the United States, cotton stocks are virtually nil. At the end of the 2013-2014 growing year, stocks were 2.45 million bales, compared to 2.95 million bales in 2009-2010 and 5.5 million bales in 2004-2005.

China, however, has continued to grow its cotton reserve. Beginning in 2011-2012, China added more than 20 million bales to its reserve, ending the year with more than 31 million bales. In 2012-2013, Chinese producers — the world’s most prolific — added almost another 20 million bales to end the year with 50.36 million bales in reserve. In 2013-2014, that number grew to 62.71 million bales.

Arkansas Upland Cotton

Crop Year^*	Planted Acres	Yield/Planted Acre	Bales
2013	310,000	1,115	720,000
2012	595,000	1,046	1,297,000
2011	680,000	901	1,277,000
2010	545,000	1,036	1,176,000
2009	520,000	786	852,000
2008	620,000	1,003	1,296,000
2007	860,000	1,058	1,896,000
2006	1,170,000	1,036	2,525,000
2005	1,050,000	1,007	2,202,000
2004	910,000	1,102	2,089,000

*(Aug. 1 – July 31)
Statistical information: National Cotton Council of America

Average price received by farmers by calendar year and crop year

Year	Calendar Year Average	Crop Year Average
2004	54.30	42.78
2005	42.69	47.31
2006	47.53	46.49
2007	49.96	60.27
2008	60.79	48.95
2009	49.15	62.10
2010	70.95	82.12
2011	88.02	88.50
2012	79.50	74.77
2013	77.15	78.36
2014	82.10	70.50