Cotton rises again

Sunday, April 3, 2011

Ethanol is one reason for the high price of corn. Another reason is pressure for farming acres from an old competitor, cotton.

The Los Angeles Times reports that cotton-picking machines last fall chugged across fields that used to grow vegetables, vineyards or lay fallow. Growers were expected to plant 309,000 acres of upland and Pina cotton, up from 201,000 in 2010. Acreage is still far less than the one million planted in California in the 1990s. Acreage across the southern United States is expected to grow to 11.04 million acres, a 50 per cent jump in production.

The benchmark cotton futures price bottomed at 37 cents a pound in November 2008 as the textile industry collapsed in the recession, and then stayed near the high of $1.57 this January. Poor weather resulted in short supplies in major growing areas around the world and demand is growing in – you guessed it – China and India. BF