Bloomberg is reporting that farmers around the world are increasing their cotton crops by the largest amount in six years in response to rising cotton prices. The price of cotton has gained 92 percent in the last six months, making “cotton the most expensive relative to corn and soybeans since 2006,” Bloomberg reports. Cotton prices are about 12 times more than corn and 5 times more than soybeans.
“We are going to make a monster crop,” said Sharon Johnson, a senior cotton analyst at First Capitol Group LLC in Atlanta. The large crop will likely push cotton futures down as much as 21 percent by the end of the year, according to Johnson. Still, the prices are so good for cotton now that U.S. farmers are likely to increase their crops by 29 percent.
A drought has reduced cotton crops the past few years, but soil moisture is up in Texas and production should increase. In the past few years farmers have favored corn and soy beans over cotton.