According to the National Cotton Council’s 40th Annual Early Season Planting Intentions Survey, U.S. cotton producers intend to plant 11.5 million cotton acres this spring, down 5.2% from USDA’s estimated numbers for 2020 which were released this month.

Upland cotton intentions are 11.3 million acres, down 4.9% from 2020, while extra-long staple (ELS) intentions of 161,000 acres represent a 20.7% decline. The detailed survey results were announced during the 2021 National Cotton Council Annual Meeting Virtual Live-Stream Event.

(See attached table)

Prospective 2021 U.S. Cotton Area

2021 World Cotton Outlook: Recovery in World Cotton Demand as the U.S. and World Economies Rebound

Dr. Jody Campiche, the NCC’s vice president, Economics & Policy Analysis, said, “Planted acreage is just one of the factors that will determine supplies of cotton and cottonseed. Ultimately, weather and agronomic conditions are among the factors that play a significant role in determining crop size.”

She said that with abandonment assumed at 18.1% for the United States, Cotton Belt harvested area totals 9.4 million acres. Using an average U.S. yield per harvested acre of 855 pounds generates a cotton crop of 16.7 million bales, with 16.3 million upland bales and 431,000 ELS bales.

The NCC questionnaire, mailed in mid-December 2020 to producers across the Cotton Belt, asked producers for the number of acres devoted to cotton and other crops in 2020 and the acres planned for the coming season.

Campiche noted, “History has shown that U.S. farmers respond to relative prices when making planting decisions. Relative to the average futures prices during the first quarter of 2020, prices of all commodities were trading higher. For the 2021 crop year, corn, soybeans, wheat, and sorghum are expected to provide more competition for cotton acres.” 

Regional reports

Southeast respondents indicated a 4.2% decrease in upland cotton to 2.3 million acres. In the states where cotton acreage will decrease growers intend to plant more corn, wheat and soybeans. Peanuts will be added into that mix in Georgia.

Midsouth growers intend to plant 1.7 million acres, a decline of 3.7% from the previous year. All states in the region except Missouri intend to decrease cotton acreage. The declining states will plant more acres to corn, soybeans and wheat.

Southwest growers intend to plant 7.1 million cotton acres, a 5.5% decline. In Kansas, producers intend to plant more cotton acres but lost acreage in Oklahoma and Texas will move into wheat, corn and sorghum.

Far West producers are expecting to plant 197,000 upland cotton acres, a 2.5% decrease from 2020.

ELS acreage is expected to decline by 26.7% in California and 10.5% in Texas due to concerns regarding water availability. A slight increase is expected in Arizona, while New Mexico acreage is expected to remain unchanged from 2020.

Campiche reminded those attending the meeting that expectations are a snapshot of intentions based on market conditions at survey time. Actual plantings may change due to market conditions and weather. 

Economic outlook

Campiche noted that the past year was characterized by significant uncertainty and volatility. The most challenging issue facing the global cotton market in 2020 was the COVID-19 pandemic.

The pandemic caused unprecedented disruptions in supply chains and markets for cotton and textile industries during the first half of 2020. The COVID‐19 pandemic devastated textile supply chains as retail outlets shuttered their doors for months. Negative impacts were felt across the U.S. cotton industry.

The pandemic is still creating disruptions in various parts of the world, but the overall economy is recovering much faster than originally expected, according to Campiche. Current economic projections for the U.S. and global economies should be viewed with caution given further potential impacts of the pandemic.

The NCC is projecting a partial recovery in U.S. mill use at 2.8 million bales during the 2021 crop year. U.S. mills were severely impacted by the COVID-19 shutdowns in 2020. As one of the largest markets for U.S. cotton, U.S. mills continue to be critically important to the health of the cotton industry. 

World trade is estimated to be higher in the 2020 marketing year as consumption recovers. Based on sales and shipments for the year-to-date, U.S. exports are projected to reach 15.8 million bales in the 2020 marketing year. As a result of large carryover sales from the 2019 crop year and increased purchases from China, U.S. export commitments and shipments have been very strong for the 2020 crop year.

As of February 4, total commitments reached 14.1 million bales while 7.8 million bales have been shipped. Current commitments are at the highest level at this point in the marketing year since the 2010 crop year.

Despite competition from Brazil, the United States was able to regain market share in China in 2020 as a result of the Phase I agreement. The United States also had increased opportunities for higher export sales to other markets in the 2020 crop year due to lower production in Australia, Pakistan, and Turkey.

U.S. exports are projected to drop slightly to 15.4 million bales in the 2021 marketing year. With large stocks in other major exporting countries and a partial recovery in Australia’s production, the United States will continue to face strong export competition in 2021.

When combined with U.S. mill use, total offtake exceeds expected production, and ending stocks are projected to fall to 2.6 million bales. If realized, U.S. stocks represent one of the lowest levels in the last 20 years.

Campiche said world production is estimated to increase by 1.5 million bales in 2021 to 115.6 million due to a slight increase in acreage. World mill use is projected to increase to 120.9 million bales in 2021. Ending stocks are projected to decline by 5.4 million bales in the 2021 marketing year to 90.4 million bales, resulting in a stocks-to-use ratio of 74.8 %.

Although global stocks remain high, a tighter U.S. balance sheet, low supply chain inventories, increased purchases from China, speculative money flow, weaker U.S. dollar, higher grain and oilseed prices, and post-COVID demand expectations are contributing to bullish sentiment for cotton prices. However, additional restrictions related to the COVID-19 pandemic, large stocks outside of China, and low man-made fiber prices could put downward pressure on cotton prices in 2021.

NCC's website provides additional details of the 2021 Cotton Economic Outlook.