Cotton Outlook in 2022 and 2023 Mixed

Cotton Profit Potential in 2022 and 2023 a Mixed Bag

Matt Wilde
By  Matthew Wilde , Progressive Farmer Crops Editor
Franklin Carmack picks cotton near Ripley, Tennessee, on Oct. 5. He expects average yields and decent profit potential this year. Turning a profit in 2023, though, is a concern for the farmer. (DTN photo by Matthew Wilde)

RIPLEY, Tenn. (DTN) -- It was only Franklin Carmack's third day picking cotton on Oct. 5, but the Tennessee farmer surmised it would be a productive and profitable harvest.

Cotton yields will likely average between 1,300 to 1,400 pounds per acre, Carmack said. That's about average for the farm, he continued, but excellent given the challenging growing season -- a wet and cold spring and hot and dry summer. He hopes to make a profit of 10 cents per pound on 1,400 acres of fiber. It's not light-a-cigar-and-retire money, but Carmack is happy there's a return on investment since input costs have soared.

"We think our cotton is going to be better than we thought it would be during the summer drought. That really had us nervous coming into harvest," Carmack said from the seat of his picker near Ripley. "It feels good to sell at a profit this year ... but 2023 is going to be a struggle (financially)."

Watch a video of Carmack harvesting cotton and talking about the crop's income potential at

DTN Lead Analyst Todd Hultman said Carmack's production and revenue story this year and concerns about 2023 will likely resonate with many growers across the Cotton Belt. Yields are good for farmers fortunate to harvest a crop (many fields in drought-stricken areas were abandoned, especially in Texas) and prices leading up to harvest were strong but have declined recently due to recession fears. The cotton balance sheet will likely be positive for growers in 2022, Hultman said, but the same can't be said for next year.

"I think 2022 will be a profitable year, but it's going to be a lot narrower of a margin than most were hoping for earlier this year," Hultman said. "We definitely have concerns for 2023."


U.S. farmers planted 13.79 million acres of cotton, but only 7.88 million acres are projected to be harvested, according to the latest USDA World Agricultural Supply and Demand Estimates report. Field abandonment is estimated at 43%, the largest rate since the early 1950s.

"The cotton crop did take a big hit overall from drought," Hultman said, most notably in Texas, Oklahoma and Kansas. Texas cotton growers planted 7.9 million acres, according to USDA data, but only 2.5 million acres are projected to be picked.

U.S. cotton production is estimated at 13.81 million 480-pound bales, down 21% from last year. The average yield is projected at 842 pounds per acre, up from 819 pounds per acre last year.

While drought ruined crops in some areas, too much September rain was Ryan Jenkins' nemesis near Jay, Florida. Boll rot will likely reduce yields from a once-promising 1,250 pounds per acre to maybe 800, he said.

"The rains just never quit. There's a lot of boll rot," Jenkins said.


The latest USDA 2022 cotton cost-of-production forecast is $803.51 per acre. In October, USDA projected the season-average cotton farm price for the 2022-23 marketing year at 90 cents per pound. For example, 900 pounds per acre at 90 cents per pound equals $810 per acre. It's not uncommon for farmers such as Carmack to produce 1,200 pounds or more per acre, on average.

Hultman believes this year's cost-of-production forecast is low and will be revised in the future to take into account higher fuel and fertilizer costs. He still expects most farmers will produce enough cotton this year and sell it at a price to more than cover expenses.

Farmers had plenty of opportunity to sell December 2022 cotton above 90 cents per pound this year. It was consistently above that price since the beginning of the year, hitting nearly $1.34 per pound in mid-May and mostly staying above $1 per pound. December 2022 cotton dropped below 90 cents per pound briefly in mid-July and in October, with the Oct. 18 close at 82.29 cents per pound.

"Unfortunately, when prices were in the $1.30-per-pound range, I don't think most producers were able to take advantage of it due to production uncertainty," Hultman said.

Prior to harvest, Carmack sold about half of his expected 2022 cotton in 100-bale increments, ranging from 90 cents per pound to nearly $1.30 per pound.

"Normally, I would sell more, and I wished I sold more when it hit $1.30 per pound, but with the drought and not knowing how the cotton was going to hold up in the high temperatures, we held off," he said.

Carmack hopes sales average $1.10 per pound for cotton this year, which will exceed expenses of about $1 per pound. "The cotton market has tanked lately. We'll put the unsold cotton in the warehouse and hope the market comes back around."

Jenkins also estimates 2022 cost of production at about $1 per pound. But with low yields, a drop in prices and less than 10% of his expected lint production marketed, he said breaking even this year will be difficult.

"Even if it (cotton futures price) gets back to a $1 (per pound), that's not going to get me anywhere. It may pay the bills," Jenkins said.


With U.S. cotton ending stocks projected to be the lowest in six years for the 2022-23 marketing year at 2.8 million bales and this year's decline in production compared to 2021, Hultman said market fundamental favor a price rebound. Futures prices could exceed $1 per pound again in the months ahead as buyers need stored cotton, he said.

But there are plenty of factors holding prices down, Hultman continued, ranging from rampant inflation and the high dollar value to languishing worldwide economies and high interest rates.

"The tough outside market concerns aren't going away any time soon," Hultman said. "For unmarketed '22 cotton, wait until after harvest to sell and spread sales out from January through May and hopefully take advantage of a higher price environment in early 2023."

For next season, Hultman said profit potential dims. December 2023 cotton closed at 75.75 cents per pound on Oct. 18.

"With even higher production costs in 2023, it looks like it could be a tough year," Hultman said.

If the December 2023 cotton price isn't well over $1 per pound by the early spring, Jenkins said farmers like him with other planting options will drastically cut back on cotton acres or not grow the crop.

He grew 1,000 acres of cotton this year but will cut back to 600 acres in 2023 if prices don't improve. And the only reason he would grow cotton at all is for rotational purposes to break the disease cycle for his peanut crop. Jenkins also raises corn and soybeans.

"I'm telling you, people are not going to plant cotton at these prices next year. I mean, any option they have, they will plant that instead," Jenkins said, noting buyers will need to bid up cotton to get acres.

As far as marketing advice for the 2023 crop, Hultman said he wouldn't be in a hurry to forward cash price cotton.

"For farmers dealing with dust (drought) right now, they need some confidence that there's a chance for decent production ahead," he continued. "If you are in an area with better soil moisture, start thinking about price targets that would be good and make those plans."


DTN Ag Meteorologist John Baranick said judging soil moisture for future plantings is tricky. Although it's tied to precipitation, that's not the only thing that goes into it.

Baranick said surface moisture has improved recently throughout much of West Texas, but it's still dry elsewhere from California to Georgia.

"Looking deeper into the subsoils, moisture levels in the Southeast states are closer to normal, but Texas' long-standing drought has really sapped a lot of the moisture out. Recent rains haven't been able to cover for that just yet," he said. "Above-normal precipitation has fallen in southern California and through the rest of the Southwest, but soil moisture is still well below normal for this time of year."

The forecast going through winter favors the continuation of La Nina, which is a drier pattern for the southern half of the U.S. However, it is forecast to weaken in the spring, and that will cause a lot of variability going forward, Baranick said.

"Using similar years of coming out of La Nina conditions, this favors better chances of rainfall from eastern Texas to the Atlantic Coast in the March-through-May period, but drier across West Texas to the Southwest," he continued. "That doesn't mean that soil moisture will be good or bad for the start of next season at the right time for planting and establishment, but it does paint an overall picture similar to this previous year, especially when you take the widespread drought across Texas and the Southwest into account."

Matthew Wilde can be reached at

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Matt Wilde