Shift is on--California losing cotton acreage

Issue Date: December 19, 2007

By Christine Souza
Assistant Editor

Grower Mark Watte is seeing a major shift from cotton production to permanent crops like pistachios and almonds on farms such as his in Tulare County.

When Mark Watte's father farmed in the San Joaquin Valley in the early 1950s, cotton was king, with more than 1 million acres under cultivation. The Watte family has grown cotton in Tulare County for three generations.

While cotton remains an important crop for the state, there has been a dramtic shift away from it as the crop of first choice among San Joaquin Valley row-crop farmers. Leaders of this agricultural sector say the number of acres has decreased by about half and the price growers get for the crop is what they would have received prior to the 1980s.

"Cotton has always been the staple crop around here. Not long ago, there were more than 1 million acres of cotton in the San Joaquin Valley and now we're down to about 450,000 acres," said Watte, who serves on the board of directors for Calcot and Cotton Inc. "Cotton acres in California started to decrease six or seven years ago, but we've really seen a significant decrease in the last three to five years. There's just been more of a conversion to permanent, higher value crops. It is pure economics."

To remain profitable, Watte and his brother, Brian Watte, are growing a wide variety of crops including cotton, alfalfa, black-eyed peas, sugar beets and pistachios. In 1999 the Wattes ventured into the dairy business. They purchased and renovated an older dairy and now milk 1,400 head of Jersey cattle. This year, the family harvested 2,000 acres of acala cotton and next year plan to reduce that to 1,100 acres of cotton; the remaining acres will be planted in pistachios and feed crops.

"California agriculture--we have a unique set of circumstances here with the length of the growing season, water and good soils and we need to use those acres to grow things that do not grow well in other parts of the world. Our cotton used to be something that was fairly unique, but other places in the world are now growing it. So, it is not that special anymore," Watte said. "But we're doing pistachios, almonds, processing tomatoes ... those are the things that other places in the world can't do. California continues to find its niche. Costs for our inputs, land and water are pretty high here so we need to grow crops that have a good return."

Diversified farmer Don Cameron, general manager of Terranova Ranch Inc. in Helm, has grown cotton in Fresno County for more than 25 years. At one time the farm grew 2,200 acres of cotton, but now it is down to about 400 acres.

"The price for cotton has remained at or below the cost of production for quite a few years. It has been difficult to be profitable so acreage has been declining and people have been growing higher-dollar crops," Cameron said. "Starting in the 1980s, acreage has gradually switched from acala or upland cotton to mostly pima cotton. That trend will likely continue.

"I think it will be a difficult year in 2008, but I think you'll see an acreage increase in 2009. There are a lot of soils that just aren't suited for some of the other crops," Cameron said. "Cotton has been a mainstay for a long time and we just need to get the production back in California before the infrastructure is gone. I think there is a place for cotton."

To stay profitable, Terranova Ranch also grows a number of commodities including winegrapes, processing tomatoes, alfalfa, garlic, onions, carrots and artichoke seed. In addition, 88 of its cotton acres are planted in organic cotton. Terranova Ranch is one of two organic cotton growers in the state. Of the country's 10.5 million acres of cotton, about 20,000 to 25,000 acres is organic cotton.

Mark Bagby, director of communications for Calcot, a member-owned cooperative of 1,400 cotton growers, said today's growers diversify their risk and don't have everything tied up in one specific crop. They might grow a variety of crops like cotton, alfalfa and corn, or they may also have an almond orchard or vegetables, he said.

California growers have long been diversified. The big change and thrust of what is happening today is growers are switching from cotton to other crops in percentages that the cotton sector has not seen before.

"Over the past 10 years, the state's cotton acreage has fluctuated, with a couple of years actually higher than the previous season. Overall, though, California's cotton acreage has been reduced with 1997's planted acreage of 1.1 million, now down to 455,000 acres this year," Bagby said.

He cites water availability, price and cost of production as the biggest reasons for the loss.

"California's crop being totally irrigated means our cost of production is higher than much of the rest of the U.S. and the world on a per-pound basis," Bagby said. "We've been able to compensate for that by producing top-quality cottons that command a higher price and by having if not the world's highest yields, certainly the highest U.S. yields, year after year."

California cotton growers currently grow cotton at 1,437 pounds per acre, which translates to nearly three bales of cotton to the acre. The U.S. average is 859 pounds per acre.

While Fresno, Kings, Kern, Tulare, Madera and Merced counties remain California's top cotton-producing counties, these areas have been losing cotton acreage to trees, vines, alfalfa and silage crops. With feed and silage crops earning a good price for growers, this year saw more of the state's cotton acreage planted in corn and wheat. Bagby predicts that growers will plant even fewer acres of cotton next year.

"Cotton prices have been weak particularly when you factor in inflation and production costs. Growers are even more encouraged to be frugal," Bagby said. "Because everything is so expensive, you don't put anything on it that you don't have to."

Even with the number of cotton acres decreasing, California remains a significant player in the world cotton market because it has an ideal climate for growing high-quality cotton varieties--acala and pima. Last year, pima surpassed acala cotton acreage for the first time. Pima, which has an extra-long staple, is used to produce fine fabric items including dress shirting, sheets and top-quality towels.

"Growers are pretty optimistic people and they produce a top-quality product and they take a lot of pride in that. Not everybody can do this on every type of soil," Bagby said.

About 90 percent of the annual crop is exported to Pacific Rim countries such as Japan, Korea and Indonesia.

Whether California farmers will continue growing cotton in the future depends on a variety of factors including water availability, cotton prices, cotton's place in future farm bills, adhering to principles of the World Trade Organization and gin capacity.

Daniel Sumner, director of the University of California Agricultural Issues Center and a professor of agricultural and resource economics, said the commodities grown in California today might be different in years to come.

"Many of us remember when barley was a very important field crop in California. That is not true anymore. Some of those fields are now winegrapes and other crops," Sumner said.

(Christine Souza is a reporter for Ag Alert. She may be contacted at csouza@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item. Top