Shurley on Cotton: August Numbers Likely Neutral To Bearish

Aug 14, 2014

By Dr. Don Shurley

The 2014 US cotton crop has been revised upward by one million bales from the July estimate. The August USDA crop production and supply/demand numbers released August 12 are the first estimates of the season based on an actual producer survey.

The July estimate was 16.5 million bales – based on estimated acreage abandonment of 15 percent and yield of 816 lbs/acre. These first produced-based numbers show abandonment of only 10 percent and a yield of 820 lbs/acre. The crop is forecast at 17.5 million bales – one million bales higher than the July estimate.

Abandonment is estimated at only 16 percent for Texas, and yield forecast at 632 lbs/acre. Yields appear strong just about everywhere. Much of the Mid-South looks to be over two bales per acre, and the Southeast also looks good, with yields approaching 900 lbs/acre or more.

The one million bale increase in the U.S. crop is offset somewhat by a half million bale increase in expected U.S. crop exports for 2014/15. This likely reflects the increase in production and available supply and perhaps the impact of the lower tier of prices we are experiencing. U.S. ending stocks are still expected to rise three million bales from last season.

Looking at the World and foreign numbers, production overall is changed very little other than in the U.S. The China crop estimate is unchanged, the Australia and Brazil crops are lowered, and the India crop is increased. World cotton use is increased 1.3 million bales from the July estimate. World ending stocks are revised downward by 600,000 bales.

The August numbers are best described as a mixed bag. Increase in the U.S. crop is bearish, but this may have been anticipated and already largely factored in to the current level of prices. Certainly, however, there is fear this could push prices even lower. But, the increase in U.S. exports is good news, and the increase in World Use is good news. Ending stocks did not increase, and that is good news.

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Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.