Cotton Prices Climb As Hopes Dry Up For A Bountiful Crop In West Texas

The start to the 2021 planting season is already posing problems.

“We're extremely dry,” says Blake Fennell, a cotton farmer in Earth, Texas. “I would say we're giving 2011 a run for its money, but we're probably drier than 2011 at this point.”

Fennel farms on the northern edge of West Texas, an area of the country known as being the home to the largest U.S. cotton patch. And as rain chances haven't produced any measurable rainfall in over a year, Fennell says area farmers have parked planters for now.

“We've still got to give that crop every chance we think we can get,” he says. “But at the same time, we also can't waste a lot of money on a crop we don't think we're going to have going into the year.”

Fennel says if rains don’t hit these Texas fields in the next month, it’ll be devastating to the West Texas cotton crop.  Just this past weekend, West Texas farmers had chances of rain. But Fennell says his area only received less than one-tenth of an inch of rain.

“We’re monitoring our inputs very closely,” he says. “Going forward, that’s going to be the key. It's going to be the key to survival this year.”

In the mid-South and Southeast, cotton farmers are dealing with the opposite problem.

“We're extremely wet,” says Brad Warren, who farms in southeast North Carolina. “We've been wet since last October.”

Pummeled with rain, the Southeast is already seeing a delay to the start to planting. 

“If it stays wet, and we keep getting moisture, there's a possibility we could switch corn acres over to cotton acres, maybe even bean acres,” Warren says.

For farmers in West Texas and the southeast, cotton isn’t just a staple.

“Cotton is considered a cash crop for us,” Warren adds. “So, when it gets time to plant cotton, we put it in the ground.”

National Cotton Council (NCC) says weather will have the final say on production this year.

“Some decisions may get adjusted because of weather, then you're going have producers that look at the alternative,” says Gary Adams, CEO of NCC. “Is it going to be soybeans? Or is it going to be cotton? And that's probably going to depend on relative prices.”

Adams says there’s also grave concern about the potential of Texas’ crop this year. Those same concerns are growing from a local level.

“Abandonment looks like it's going to be pretty high this year, just for the simple fact there is no ground moisture to get this crop emerged,” Fennell says.

 But as production problems play out, prices are producing profits again.

“The underlying fundamentals from where I sit are bullish,” says John Payne, author of ‘This Week in Grains.’ “I just look at the weather problems they're having in West Texas.”

The dryness in West Texas continued to play into the market this week. Cotton futures continued to rally on Tuesday.