December 14, 2010

Cotton Acreage in Mato Grosso May Increase 50% in 2010/11

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Cotton farmers in Mato Grosso are taking advantage of historic high cotton prices by greatly expanding their 2010/11 cotton acreage. Cotton acreage is expected to increase as much as 50% in the state as producers in all parts of the state including large, medium, and small producers, are all increasing their acreage.

According to the Mato Grosso Cotton Producers Association (Ampa), the 2010/11 cotton acreage in Mato Grosso is expected to be 615,000 hectares, which would be 44% more than the 428,000 hectares planted during the 2009/10 growing season. Late decisions by farmers to forgo some of their intended soybean acreage in order to increase their cotton acreage could result in even higher acreage projections in subsequent reports.

According to Conab, Mato Grosso cotton farmers are expected to harvest 935,000 tons of cotton in 2010/11, which is an increase of 60% over the 583,000 tons harvested in 2009/10. Last year's yields were adversely impacted by the early onset of the dry season that started in mid-April, which is at least a month earlier than normal.

The increase in cotton acreage is also expected to increase the number of workers directly involved in the cotton sector. The number of jobs directly involved in cotton production in the state is expected to increase from 23,400 in 2009 to 31,200 in 2010, or an increase of 40% year-on-year. It is estimated that for every 100 hectare increase in cotton acreage, 13 new jobs are created.

Most farmers in the state have been active forward sellers of their anticipated 2010/11 cotton production. Estimates are that many farmers are already 70% sold.

Cotton production in the state is expected to increase 60% in 2010/11 which will certainly cause even greater logistical problems for a transportation system that is already overtaxed.