California Cotton’s Main Competitor In 2012

July 11, 2011
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Alfalfa might pull some acres out of California’s cotton crop in 2012. The two crops always have had kind of a tidal relationship, with one or the other flowing across more land in one or two seasons, then receding to let the other regain acreage.

Cotton has gained ground over the last two seasons, with about 450,000 acres this year, and much of that gain has been at the expense of alfalfa, which is mostly baled, with some chopped for silage.

Historically high cotton prices accounted for much of that crop’s gain. Falling hay prices — due to weak milk prices and a collapsing dairy industry — opened more ground for cotton.

With that, supply and demand shifted into gear, and hay prices went up. Dairy farmers certainly went through tough times, and some didn’t survive. But people continue to eat corn flakes, so you need milk. With fewer farmers growing alfalfa, the price went up. Keep in mind that alfalfa is something like a semi-permanent crop. It takes time to establish a stand, and fields stay in alfalfa for 3 years or more. It’s not the kind of crop that turns on a dime at spring planting time.

Prices went up. Way up.

At one point earlier this year, we were hearing $300 a ton for quality hay. The price is now down to something like $250 a ton, still markedly high. In the 22 years I’ve been involved in California ag, it was considered a big deal in the early 1990s when hay topped $100. A market at $150 was comparable to dollar cotton. During some periods, a price of $75 or less per ton wasn’t uncommon.

“Some guys wish now that they had kept more alfalfa and had planted less cotton,” my friend Tony Touma said last week. “Even with the price being down $50 a ton, it’s still $250 a ton, and that’s a lot of money.”

Tony, who’s been a professional crop adviser in the lower San Joaquin Valley for 32 years, can probably remember when $50 could buy a ton of alfalfa.

How much land alfalfa regains will partly depend on the price of cotton this fall. The cotton market has been on an incredible run. And prices paid for California Acala and Pima have been far above the general trade for Southern fiber. Buyers looking for Pima several months ago were offering $3 a pound. If prices hold at $2 or better, that may stem some of the interest in growing more hay.

 

 

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