Texas farmers will abandon a major portion of their cotton crop this year amid one of the region’s worst droughts in decades, Gro predicts.
A drop in Texas cotton production would have far-reaching effects on global cotton supplies and prices. Texas is the largest cotton-producing state in the US, which in turn is the No. 3 producer worldwide. So far this year, CME July 2022 cotton futures are up 32%.
Texas cotton-growing areas are currently experiencing “severe” levels of drought, according to Gro’s Climate Risk Navigator for Agriculture, which can weight drought readings and other growing conditions by specific crops. Gro Drought Index (GDI) readings are a strong predictor of abandoned acres in Texas’ cotton-growing areas, with GDI readings during the main growing month of July showing the greatest correlation, a Gro analysis shows.
Despite a 7% increase in planted cotton acres in Texas, heightened GDI will weigh heavily on harvested area. At current GDI readings, Gro estimates that around 47% of cotton acres could be abandoned. Over the past decade, Texas farmers abandoned an average of 29% of cotton acres, deeming them uneconomic to harvest. A peak came during the historic drought in 2011, when 62% of cotton acres were abandoned and cotton yields slumped by 16% year over year.
Other growing conditions also bode poorly for the Texas cotton crop. For example, Lubbock County, located in one of West Texas’ main cotton raising regions, has received just 0.77 inch of rain so far in 2022, some 83% below the 10-year average. In the historic drought year of 2011, Lubbock had 0.95 inch of rain during the same period.
May is typically the rainiest month in West Texas, and while rain is forecast for the region during the next two weeks, it will be accompanied by high temperatures, which could undo any moisture benefit.
Join Gro’s research analysts for our discussion of major soft commodities – including cotton, cocoa, sugar, and coffee – on Thursday, May 19, 10-11 AM EST. We will assess growing conditions using Gro’s Climate Risk Navigator for Agriculture and the implications for prices and supply availability in 2022.
(May 19 Webinar) 2022 Risks Across Cocoa, Sugar, and Coffee: Global Growing Conditions and Climate
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