COTTON PRODUCTION
IN WEST CENTRAL TEXAS
Billy E. Warrick, Chris Sansone and Jason Johnson
Extension Agronomist, Extension Entomologist and Extension Economist


TABLE OF CONTENTS

CULTURAL PRACTICES

FOLLOW PRACTICAL MECHANIZATION

CONTROL INSECTS, DISEASES AND WEEDS

HARVESTING, HANDLING AND GINNING

ECONOMICS

ACKNOWLEDGEMENT

Cotton, wheat, and grain sorghum are the principal crops produced in West Central Texas. The cotton growing area represents a portion of two cotton production regions, that of the Southern Rolling Plains and the eastern portion of the Trans-Pecos Region. Moisture is the primary limiting factor in crop production in these regions with an average annual rainfall ranging from 16 to 25 inches. Crop yield potentials vary greatly within this area because of erratic rainfall distribution each year. Moisture management is the key to increased production.

Soil types range from sandy loams to clays. Less than nine percent of the cropland is irrigated. Therefore, much of the approximately 320,000 acres planted to cotton annually is grown under dryland conditions in skip-row planting patterns. Cotton yields for the last 10 years have averaged 260 pounds of lint per planted acre.


Cultural Practices

Land Preparation. On many soils, cotton is produced with only seven operations. Generally, these are: (1) shred stalks; (2) apply herbicide and incorporate (February or March); (3) bed; (4) furrow dike; (5) plant; (6) cultivate and reestablish furrow dikes; and (7) harvest.

Several variations to this tillage system can be used depending on individual situations. Occassionally, deep plowing is required to break-up developing compaction zones. Establishing furrow dikes before April provides an opportunity for soil moisture accumulation when April and May rains occur. The furrow dikes are re-established to catch late summer and early fall rainfall.

Reduced tillage is increasing in popularity but may not be possible on all soils. Deep tillage may be necessary for residue management in areas subject to cotton root rot or for insect and disease management.

Regardless of the methods used, cotton requires a moist, firm, weed-free seedbed.

Fertilization. Soils in West Central Texas are generally deficient in nitrogen and phosphorous. Research conducted by the Texas Agricultural Experiment Station indicates that profitable fertilizer rates range from 20 to 40 pounds of nitrogen in combination with 20 to 40 pounds of phosphorous (P205) per acre. No significant response to potassium fertilization has been observed. Producers should consider various soil properties, cropping history, past fertilization and moisture prospects when determining fertilization programs. Apply all phosphate and potassium before planting. Nitrogen timing may vary according to soil type. Make nitrogen applications on sandy soils as near the time the plants need it as possible. Zinc may also be deficient on low organic matter, high pH soils. A soil test conducted by a reputable laboratory is fundamental for developing a sound fertilization program.

Rotations. Where possible follow a 3-year rotation of cotton, grain sorghum, small grains or other crops depending on local conditions. Fibrous rooted crops including hay and high-residue forage may be used. Some of the clovers and other soil-building crops may also be used in the rotation program. However, moisture limitations have minimized the use of soil-building crops.

Root rot infested acres and possible herbicidal residues affect rotations. Record these areas on a map. Livestock and the availability of stock water also influence the type of rotations that can be established.

Turn under as much organic material as possible before seedbed preparation to increase water infiltration and reduce cotton root rot. Make maximum use of crop residues. Cotton burs applied at 2 to 6 tons per acre improve soil tilth, but this practice occasionally spreads wilt disease and weed seeds. Use farm and commercial feedlot manure where available.

Irrigation. Maximum cotton yields may require 21 to 25 inches of water for plant use. However, good yields are possible with less water if irrigation is timed carefully to adequately supply the crop during critical water demand periods. Efficient and profitable irrigation depends on the time and amount of water available.

Daily water use generally is less than 0.1 inch per day until squares form but increases rapidly when blooming starts. It remains at 0.25 to 0.40 inch per day through the blooming and boll development period and decreases as the first open bolls appear.

Adequate moisture at planting time helps assure uniform stands, provides water for early season growth and encourages deep root development. A preplant irrigation can supply this water when rainfall has not replenished the root zone. Apply enough preplant irrigation water to fill the potential root zone to field capacity. In many cases, furrow dikes eliminate the need for preplant irrigation.

Cotton roots may grow to a depth of 5 to 6 feet in deep loam or sandy loam soils. But heavy clay subsoils, compacted zones, clay layers and other poor soil conditions often restrict root development to shallow depths. Even in deep, medium soils most of the water for the crop is removed from the top 3 to 4 feet. In heavy clays, most of the crop's water is from the top 2 to 3 feet of soil.

Rainfall variations prevent establishment of specific irrigation schedules during the growing season, but irrigation generally is not required before the bloom stage if the root zone is saturated when the crop is planted. Adequate moisture is especially important from early bloom period through boll development. For high yields, cotton requires 3 to 4 inches of water every 12 to 15 days during this time. If rainfall does not supply this water, irrigate to provide an equivalent amount. Some very coarse sands or shallow soils may require smaller amounts of water more frequently.

Excessively moist soil conditions may slow maturity. To encourage earlier maturity, increase the interval between irrigations after peak bloom stage, about 30 to 35 days after first bloom. Irrigation past mid-August can delay maturity and increase the risk of poor fiber quality and harvest conditions. Early determinate varieties may benefit from irrigation at early square stage.

Varieties and Planting Seed. Study the yield records and fiber properties of varieties planted in Experiment Station and result demonstration tests in your area. A well-adapted variety shows consistently high performance and is in the upper third of the test in yield over a period of years. Base variety selection on yield performance, earliness to obtain desired maturity, disease resistance and desirable fiber properties. Consider early maturing varieties to reduce production cost through better pest management and harvesting before unfavorable weather.

High quality seed is essential to getting the crop off to a good start. Use planting seed of high germination and density. Avoid planting seed with low germination or high free fatty acid, as well as cracked or mechanically damaged seed or seed stored under high moisture conditions. Seed for planting should be harvested only from a mature crop.

There are several measurements available to determine seed quality. All give a good estimation of quality, but measure different aspects. When all the tests are used in conjunction with each other, a true picture of seed quality is apparent. Free fatty acids (FFA) alone only serves as a rough estimate. In general, cotton seed that contains less than 1% FFA are considered good quality, but seed testing 1.5% or higher may be weak. If the FFA content is above the 2-3% level, something has caused the seed to deteriorate. The standard germination test that is performed on all cotton seed is conducted under ideal conditions. Eighty percent germination seed should produce an 80% stand under warm, ideal planting conditions. It is possible to have low FFA seed with a good warm germ, and still have poor vigor seed.

Generally if planting conditions are poor with marginal soil temperatures, then seed with the highest possible Cool-Warm Vigor Index or CWVI, should be planted. As conditions improve and become more conducive to stand establishment, lower quality seed can be planted. The Cool-Warm Vigor Index, developed by Dr. Norman Hopper--Professor of Seed Physiology at Texas Tech, is a measure of the seed's germination, and vigor. The CWVI is a combination of the warm germination test results (obtained from counts after four days of incubation) and results from a cool germination test (results obtained after seven days of incubation). Seed lots with an index of 160 or greater have "Excellent" vigor, 159-140 is "Good"; 139-120 is "Fair" and less than 120 is "Poor". Generally if planting conditions are poor with marginal soil temperatures, then seed with the highest possible CWVI should be planted. As conditions improve and become more conducive to stand establishment, lower quality seed can be planted. The Texas Department of Agriculture's Seed Laboratory in Lubbock will perform the germination tests for a fee.


Follow Practical Mechanization

Planting. Where possible, plant on shaped beds with precision depth control planting equipment rather than in furrow planting. Advantages of bed planting include less power requirements, soil temperature 3° to 4° higher in beds than in furrows, more precise control over depth of seed placement with less scatter pattern in the drill, significant increase in speed and capacity, more uniformity in emergence rate, quicker seed germination, increased rate and uniformity of growth and maturity and increased yield. Bed planting improves chemical weed control practices of pre-emergent and post-emergent chemicals. Other operations such as defoliation, desiccation and harvesting are easier on bed-planted cotton. Harvesting efficiency can be increased as much as 10 percent.

Planting Date. To reduce damage from seedling disease, a uniform planting date of May 15 or later is suggested. June 20 is the last practical date for planting but in some years cotton, planted through July 4, has produced about 1/2 bale per acre.

By planting after May 15, seedling emergence is faster and a stand is obtained in 3 to 5 days because of warmer soils. Fewer seeds are needed (8 to 14 pounds per acre) depending on the variety. This planting date has reduced the number of cultivations and trips over the field to salvage the stand. Cotton planted after May 15 is less likely to require replanting than earlier planted cotton. In addition, research data consistently indicate a yield advantage for cotton planted the last half of May.

Planting Rates and Patterns. Planting rates should be based on a target plant population. Under irrigation three to four plants per foot on 40-inch rows is adequate for maximum yield. Higher planting rates increase seed costs, have adverse effects on yield and quality and intensify seedling disease problems. Under favorable dryland conditions, a plant population of two to three plants per foot is sufficient on 40-inch rows. Seed size varies among varieties and should be considered when planting. Under dryland conditions, any stand greater than 45,000 plants per acre (3.4 plants per foot) is excessive.

General planting patterns used in West Central Texas include:

 Percent of the total acreage
38- to 40-inch rows31
2 X 1, 40-inch rows44
2 X 2, 40-inch rows3
4 X 2, 40-inch rows12
30-inch rows9
20-inch rows0.5
10-inch rows0.5
 100.0

Plant seed at a 2-inch depth with a seed press wheel. Uniform planting depth gives earlier and more uniform stands resulting in higher yield.

Crops grown skip-row under irrigation require less fallow area than dryland crops. To efficiently irrigate a skip-row pattern with a sprinkler system, rows would have to be established in the same pattern that the sprinkler travels and have a drop tube with a sock running between the planted rows. The use of furrow dikes will help to keep the water from running off target. Another effective way of applying irrigation water is with a drip system. A well designed drip system can be up to 25 percent more efficent than water applied down the furrow on flood irrigated cotton. On clay soils, less fallow area is desirable than on a sandy soil since the lateral root growth is less extensive.

Do not decrease the seeding rate on skip-row compared to solid planting. Do not exceed a seeding rate of six seed per foot of row or a final stand of four plants per foot of row, regardless of row pattern.


Control Insects, Diseases and Weeds

Insect Control. Insect populations can be a major factor limiting cotton production in West Central Texas. For effective economic control, combine cultural control measures with natural control agents in the field and with the judicious use of insecticides. To manage insect infestations efficiently each producer should learn how to determine insect infestation levels, recognize damage caused by various insects and base insecticide application decisions on the current field situation.

Thrips, aphids and fleahoppers are early season pests and can be found in cotton before the first one-third grown squares (l/2 inch in diameter). Fleahoppers can delay cotton production by blasting small squares during the early fruiting period. When this happens, insecticidal control measures are required. Early in the growing season, seldom do thrips and aphids cause excessive damage in the Southern Rolling Plains.

From the time one-third grown squares are present until peak bloom (late June until mid-August) bollworms/tobacco budworms and aphids are of primary concern. If at all possible, limit insecticide use during this period.

For specific insect management recommendations, see E-6 Management of Cotton Insects in the High Plains, Rolling Plains and Trans-Pecos Areas of Texas. This publication describes methods for determining the infestation levels and the need for insecticidal applications. Insecticide recommendations are given in E-6A, Suggested Insecticides for the Management of Cotton Insects in the High Plains, Rolling Plains and Trans-Pecos Areas of Texas.

Seedling Diseases Complex. Planting seed should be of the highest quality, most vigorous and best germination available. They should be acid delinted and treated with a seed protectant fungicide. Seedling disease should not be a persistent problem. Bed planting is also helpful to control seedling disease.

Bacterial Blight. The best approach in dealing with bacterial blight is to plant resistant varieties. Use acid delinted, treated seed and rotate with other crops. Avoid excessive nitrogen rates.

Cotton Root Rot. Follow a 3-year rotation program with cotton, sorghum and small grains. Bury the crop residue by deep-breaking with a moldboard plow.

Boll Rots. This may be damaging in some years. Use cultural practices that discourage excessive vegetative growth such as moderate use of water and nitrogen. Control insects to remove injury to bolls. Fungicidal control is usually not necessary in West Central Texas.

Nematodes and Fusarium Wilt. Resistant varieties are now available for controlling this disease complex. Most have desirable agronomic characteristics and good resistance.

Verticillium Wilt. Plant to assure uniform and adequate stands. Avoid excessive irrigation, high nitrogen fertilizer rates, deep cultivation and crop residues. Rotate with grass crops or other immune crops, and plant resistant varieties with improved agronomic characteristics.

Weed Control. Combine crop rotation, mechanical methods and herbicides to insure a successful weed control program at minimum cost. Select herbicides based on specific weed or grass problems encountered in each field and rotational crop intentions. Details concerning herbicides and suggested rates can be found in B-5039, Suggestions for Weed Control in Cotton. Always consult product labels before applying herbicides.


Harvesting, Handling and Ginning

Harvesting seed cotton is accomplished by mechanical stripping in West Central Texas. A key to good harvesting is proper defoliation and/or desiccation. Some producers apply a defoliant before desiccation to remove the leaves. The more common practice is to desiccate 7 to 10 days before harvesting. A good job of desiccating the plant allows the bolls to break free and minimize "tagging". See Cotton Harvest-Aid Considerations for West Central Texas for more information.

Harvest cotton when the seed cotton moisture content is less than 12 percent. Trash in seed cotton contains considerably more moisture than does the lint or seed. Early morning and late evening harvested cotton should go directly to the gin for processing. In general, harvest when the relative humidity is less than 60 percent. Strive for a harvesting efficiency of 96 to 98 percent. As a rule, when fields contain "dead cotton" (root rot), harvesting efficiency drops.

Harvest timing is critical. Following desiccation, 7 to 10 days are required for lint, seed, burs and stems to dry. Stalks lose moisture faster than bark. As a result, the stalk pulls away from the bark. If harvest is started while the stalk is in this condition, the cotton will grade "barky". Eight to 10 days following desiccation, the bark loses moisture and again tightens up. This is a good time to strip. If harvest is delayed 3 weeks beyond desiccation, the bark again becomes loose due to normal deterioration and barky cotton can result.

Gins may not be able to process seed cotton at the same rate it is harvested. The cost of gin equipment for this purpose is prohibitive. Labor and energy costs at gins have risen and resulted in a shorter work week and a longer gin season. Hence, seed cotton storage in covered modules is a common practice in West Central Texas.

Module building is the best method of storing seed cotton for the preservation of lint and seed quality. It consists of forming a seed cotton "module" 24 or 32 feet long and 6 to 11 feet high with a density of 7 to 12 pounds per cubic foot. Store the module on well drained, compacted sites and cover with a tarp. The module can be transported directly to the gin or stored. Seed cotton moisture should not exceed 12 percent to avoid "hot" modules. A moisture level of 8 to 10 percent is considered ideal for harvesting and storage. A 32-foot module of stripped cotton contains approximately 10 bales. Special module transporters are used to move modules from the field to the gin or central storage location.

Gin seed cotton with a moisture content at the feeder apron of 6 to 8 percent. Excessive drying results in broken fibers. Insufficient drying reduces the seed cotton cleaning equipment efficiency, resulting in trash particles in the ginned lint.


Marketing Tools and Strategies.

There are a wide array of marketing tools available for cotton producers to consider when marketing cotton. Each of these alternatives has its own advantages and disadvantages. This gives producers greater flexibility to implement a marketing plan, but also requires a well-founded strategy to coordinate the producer's financial objectives, marketing expertise, and desired level of risk tolerance. For the most part, producers face two types of price risk in a cotton marketing program: basis risk and market risk. Basis risk refers to the variation of prices offered at the local gin and the futures market price (Local Cash Price - Futures Price). Market risk refers to the actual variation in cotton prices as the production season progresses. Producers should be aware of these sources of risk and coordinate their marketing strategies to address the risks they are willing to accept and those they are hoping to avoid.

For many producers, the marketing period for cotton will span a period of 16 months. When cotton is planted, the actual cash price at harvest is unknown. The best forecast of the harvest price is depicted by the cotton futures market. Throughout the marketing period, cotton futures prices are variable and subject to wide swings as supply and demand conditions adjust. While farmers as individuals have no control over the level of prices, they do have control over the timing and amount of their expected production that they choose to market at currently available price levels. For the purposes of this discussion, available marketing tools will be categorized as pre-harvest or post-harvest. Regardless of the chosen pricing method, producer pricing decisions should be made based on knowledge of supply and demand conditions, price trends, and numerous market information sources such as the Texas AgriLife Extension Service Cotton Outlook.

Pre-Harvest Pricing Alternatives

Prior to harvest, many of the most commonly used marketing alternatives involve the cotton futures and options. Specific examples of these strategies include: (1) doing nothing, (2) marketing through an independent or cooperative "pool", (3) forward contracting, (4) Hedging with Futures, (5) purchasing Put Options, or (6) "minimum price" contracts. If the farm business has a heavy cash requirement or financial obligation in the fall months, special attention should be given to pre-harvest marketing alternatives. Failure to do so not only adds to an uncertain price at harvest, but also results in missing what is often the best pricing opportunities for the cotton crop.

Do Nothing: Let's suppose that on March 1, the December cotton futures contract is 62 cents per pound. You have an opportunity to contract 100 bales of cotton for 650 points under the December cotton futures contract - or 55.5 cents per pound (650 points under is the Basis for this example). If you choose to do nothing and pass up this current pricing opportunity, you are willing to assume all the risk associated with cotton prices going lower in exchange for the chance that prices will go higher. The "do nothing" strategy is the proper choice if the outlook is for higher prices and/or if the grower is willing and able to assume both basis risk (risk that the basis will change) and market risk (risk that the market price will change).

Marketing through a "pool": The strategy of marketing cotton through an independent or cooperative pool is a concept that has been utilized by various aspects of U.S. agriculture for decades. This marketing alternative allows cotton producers to focus on cotton production and leave the crop marketing to designated professionals. In general, a producer signs a marketing pool agreement authorizing a professional cotton marketing staff to sell the expected cotton production from a specific acreage. The expected production from that farm is "pooled" with that of other growers to take advantage of the market price advantages that are available when large lots of similar classes of cotton are submitted for a single sale. The marketing staff uses futures and options for hedging purposes to manage marketing risk and spreads cotton sales throughout the year to achieve an average price for cotton. The pooled marketing strategy reduces the timing risks associated with selling an entire crop at a single point. While this marketing alternative has grown in popularity, it should be noted that marketing cotton through a "pool" does not prohibit a producer from independently incorporating other risk management and marketing tools to improve their effective selling price above the "average price," expected through the marketing pool. If market prices steadily decrease (increase) over the marketing season, the pool will be subject to these same price movements - just like a producer marketing his crop independently. Therefore, marketing tools which protect downside price risk are still viable for the individual producer - even if pooled marketing is employed as a cash crop sales strategy.

Forward Contract: There are two types of forward contracts - a fixed price contract and a basis contract. The fixed price contract offers a guaranteed price for cotton meeting minimum quality requirements and specifies discounts and premiums from the base price for quality differences. If you accept a contract offer of 55.5 cents per pound on March 1, you are willing to forego the opportunity for upside gain from higher prices later in the season in return for eliminating the downside risk of potentially lower prices. This strategy is appropriate for producers who are able to lock in a favorable price above their cost of production and are satisfied with the resulting profit level afforded from current prices. This strategy eliminates both basis and market risk, but in so doing, leaves no upside potential.

A basis contract locks in the spread between the local cash price and the futures price. For example, a basis contract of 650 points under December futures would allow you to set the selling price at anytime before a specified deadline. If the futures contract traded at 68 cents, you could set your price at 61.5 cents per pound. Likewise, if the futures price fell to 55 cents, your price would be 48.5 cents per pound. This strategy eliminates basis risk, but does not eliminate market risk. This strategy is appropriate for cotton producers who are in areas where there are pronounced swings in the local basis, offering the opportunity to lock in basis when a favorable spread is available.

Futures Hedge: A futures hedge is obtained when a producer takes a position in the futures market which is opposite to their cash position. For a West Texas cotton producer, this would involve a selling a December futures contract early in the cotton production season with the intention of buying the contract back at harvest. If the price increases between the hedge placement and harvest, any gains in the value of the crop would be offset by losses in the futures market position. Likewise, a downward move in futures prices would result in a reduced expected crop value, but offsetting gains in the value of the futures market position.

Hedging with futures yields similar results as the fixed price forward contract in that the producer locks in an expected price for their cotton, but it is different in that the producer is not tied to a specific gin and the producer retains basis risk. Further, any activity in the futures market requires the producer to establish a brokerage account and post margin money with the broker.

Put Option: An option may be thought of as a form of price insurance. A put option is essentially insurance against falling prices. In order to get this insurance, the producer pays a premium. The amount of the premium depends on what level of coverage is selected and the length of time remaining until this pseudo-insurance policy expires. In general, the higher the level of coverage and the longer the time remaining, the higher the premium. An option's "strike price" may be thought of as the level of coverage being offered.

Suppose on March 1, you purchase a put option with a strike price of 62 cents - the same price that December futures are trading. If the premium is 3 cents per pound and the expected basis is 650 point under, the put option establishes an expected price floor of 52.5 cents per pound (62.0 - 3.0 - 6.5 = 52.5) less a small brokerage fee.

Notice that the put option establishes an expected price floor whereas the fixed price forward contract guaranteed a specific price. The difference in the effectiveness of these strategies depends on the cotton price movement between March 1 and harvest. If the price declined, both strategies in retrospect would prove wise. However, if the price increased, holders of the put option would be able to sell their cotton at the higher price or hold cotton in storage whereas producers that forward contracted would be obligated to deliver at the previously established lower price. It is this additional flexibility (to pocket any upside price movement) that the put option buyer retains by paying a premium. The fixed price forward contract locked in a price while the put option established only an expected price floor. Further, the put option does not tie the producer to a specific gin or require guaranteed delivery of bales. Using a put option, the farmer still retains basis risk, but not downside price risk. A put option requires a broker, but no margin money is necessary since the extent of liability is limited to the amount the producer pays for the option premium.

Some cotton buyers offer "minimum price" contracts which offer the same price protection and upward flexibility as the put option. These contracts fix the basis and establish a price floor, but do require the actual delivery of the number of bales contracted.

Post-Harvest Pricing Alternatives

After harvest, cotton not contracted must be sold or stored. Many times a post-harvest marketing plan is the result of tax benefits from deferring income into the following year or due to the expectation that cotton prices will follow the general trend of increasing into the spring months. The decision that must be made is whether or not prices are likely to improve enough to offset storage costs at what risk. Post-harvest marketing decisions typically involve selection between storage or the use a call option.

The Storage Option: On November 1, suppose you can sell cotton for 58 cents per pound. If you instead decide to store the cotton, it will cost $1.75 per bale per month plus interest (the opportunity cost of the foregone immediate revenue from selling). Three months storage will cost 2.8 cents per pound. If you expect the basis in three months to be 600 points under (basis typically narrows during the winter and spring), the breakeven price needed to justify holding cotton would be 66.8 cents on the futures market (58.0 foregone price + 2.8 storage cost + 6.0 basis) or a local cash price of 60.8 cents per pound. Storage also opens the risk of a declining price. In that case, the producer is paying storage costs for cotton that decreases in value.

Call Option: A call option may be purchased in lieu of storage and allow the producer to benefit from a post-harvest price rally. The call premium (paid to obtain the call option) substitutes for storage costs. Suppose a producer sold cotton for 58 cents per pound and then purchased a May cotton call for 3 cents per pound instead of storing the cotton. If the market goes down, the producer would fair no worse than 55 cents per pound (58.0 cents cotton sold - 3.0 cents call premium) regardless of how far prices decline. In the interim, the producer has the proceeds of the cotton sale to pay expenses or earn interest. If instead prices rise, the call option gains value and entitles the producer to benefit from the post-harvest price rally. In exchange for the call option premium, the producer is able to retain upside price potential while avoiding exposure to storage costs and downward post-harvest prices.


Economics

Ask your county Extension agent for current economic information on cotton production in West Central Texas. See current budgets, Economics of Cotton Production in Texas (Texas Cooperative Extension).


ACKNOWLEDGMENT

Appreciation is expressed to all the individuals who produced the various factsheets and publications that are linked to in these pages.

The information given herein is for educational purposes only. Reference to commercial products or trade names is made with the understanding that no discrimination is intended and no endorsement is made.

01-2011 Revision

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