Cotton Outlook: Domestic

U.S. 2022 Cotton Crop Forecast Higher in September

USDA’s September Crop Production report forecasts 2022 U.S. cotton production at 13.8 million bales, 1.3 million above the August estimate but 3.7 million bales below the 2021 crop. The larger September forecast is attributable to a higher planted acreage projection which more than offset a slightly lower yield estimate. If realized, the 2022 U.S. cotton crop would still be the smallest crop since 2015/16 and the third lowest of the last decade.

U.S. cotton planted area for 2022 was increased 10.5 percent in September based on acreage reported to USDA’s Farm Service Agency (FSA). Planted acreage is estimated at 13.8 million acres by USDA’s National Agricultural Statistics Service (NASS), while harvested area is projected at 7.9 million acres, also 10.5 percent above the August forecast. As a result, 2022abandonment projected remains at 43 percent, still the highest on record. The national yield is forecast at 843 pounds per harvested acre this season, slightly below last month’s estimate but still above the 3-year average of 834 pounds. For current production estimates by State, see table 10 published separately with this report.

Upland cotton production in 2022 is forecast at 13.4 million bales, 22 percent (3.8 million bales) below 2021 and 24 percent below the 5-year average of 17.5 million bales. Compared with last season, 2022 upland production is expected to increase in two of the four Cotton Belt regions (figure 2).

For the Southwest, despite a 1.8 million acres (25 percent) increase in planted acreage from last year, the extreme dry conditions this year led to a projected record abandonment rate of66.1 percent and a year-to-year reduction in harvested acreage by 3.1 million acres down to 3 million acres. This results in an upland cotton production forecast of only 3.7 million bales for the region—almost a 5 million bale decrease from 2021 and well below the 5-year average of 7.9 million bales. The Southwest yield is forecast at 596 pounds per harvested acre in 2022, the lowest since 2011.

In the Southeast, 2022 cotton production is forecast at nearly 4.9 million bales, 11 percent above 2021. The higher production is mostly attributable to a 0.3 million acre increase in harvested area—forecast at 2.6 million acres. Even though the 2022 Southeast forecast yield of893 pounds per harvested acre is down slightly from 2021, it is still above the 5-year average. In the Delta, 2022 cotton production is expected to approach 4.4 million bales, almost equal to the 5-year average of 4.5 million bales. This is largely the result of a 24 percent year-to-year increase in harvested acreage to 1.965 million acres, more than offsetting a modest drop in yield to 1,069 pounds per harvested acre from 1,131 pounds last year.

In the West, the 2022 upland crop is projected at 445,000 bales, compared with 478,000 bales in 2021. Planted area is estimated at 186,000 acres, slightly above last year’s area but still well below the 5-year average of 252,000 acres. Meanwhile, a yield expectation of 1,283 pounds per harvested acre—compared with a 5-year average of 1,314 pounds—is likely to keep the West’s upland crop at its lowest in over 80 years. In addition, the extra-long staple (ELS) cotton crop—primarily grown in the West—is projected at 460,000 bales in 2022, above last year’s significantly reduced crop of 332,000 bales.

U.S. cotton crop development in September is running ahead of both last season and the 5-year average. As of September 4, 39 percent of the cotton area had bolls opening, compared with 28percent in 2021 and 32 percent for the 2017–21 average. Texas and Georgia—the States with the largest cotton area—had bolls opening on 41 and 38 percent of their respective area, compared with 5-year averages of 30 and 36 percent. In contrast, Missouri had bolls opening on 17 percent of its area, compared with the 2017–21 average of 28 percent. Although this season’s U.S. cotton crop is slightly ahead of last season, crop conditions remain considerably below the last several seasons (figure 3). In fact, 2022 U.S. cotton crop conditions are the lowest in several years, near those of 2018 at this point in the season. As of September 4, 35percent of the cotton area was rated “good” or “excellent,” compared with 61 percent last year, while 31 percent was rated “poor” or “very poor,” compared with 7 percent a year ago.

U.S. Cotton Demand and Stocks Increased in September

The estimate for U.S. cotton demand for 2022/23 was raised 600,000 bales (nearly 4 percent) in September to 14.9 million bales, with U.S. exports accounting for the increase. U.S. cotton exports are projected at 12.6 million bales in 2022/23, 14 percent below the previous year. With world trade prospects this season projected to be up 1.5 million bales from last year and U.S. exports constrained by the year-to-year drop in U.S. cotton production, 2022/23 U.S. cotton exports as a share of global trade (figure 4) are projected to fall below 30 percent for the first time since 2015/16. U.S. mill use remains forecast at 2.3 million bales in 2022/23, 250,000 bales below 2021/22.

With the rise in cotton production more than offsetting the demand increase this month, the U.S. ending stocks estimate for 2022/23 is now forecast higher at 2.7 million bales, a month-to-month 28 percent increase of 900,000 bales. The U.S. stocks-to-use ratio is expected to be 18 percent in 2022/23, down from almost a 22 percent stocks-to-use ratio the year before. Although both projected U.S. cotton stocks and the stocks-to-use ratio are higher this month compared with August, they are still down from the year before. With tighter U.S. stocks and with stable global cotton demand, prices continue to be supported at above-average levels. The 2022/23 upland cotton farm price is forecast at 96 cents per pound, down 1 cent from August but still up from an estimated 92 cents per pound in 2021/22 and still at a record level. The final 2021/22 upland farm price estimate will be released by USDA, NASS at the end of September.