Hurricane Devastates Southern Cotton Crops Just Before Harvest
(Bloomberg) -- Cotton growers are facing devastating losses and delays from Hurricane Helene just as harvest was beginning, marking the latest blow to profits in an already weak market.
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The storm ripped through the cotton-growing regions of Georgia and the Carolinas after making landfall in Florida last week. It has killed more than 100 people and caused widespread destruction, with the full impact of the storm still being assessed.
Between 400,000 to 800,000 bales may be lost due to the hurricane, though it will take at least four to six weeks to get more clarity, said Peter Egli, an independent consultant to the cotton industry. That would represent as much as 5.5% of total US production for this season, according to a calculation based on US Department of Agriculture data.
Helene hit cotton at its most vulnerable stage, with bolls containing seeds and lint open and exposed.
“The highest yield and highest-quality cotton is produced in that lower part of the plant — and that’s what’s going to be most vulnerable to a storm like this,” said Camp Hand, an assistant professor at the University of Georgia who is working with farmers to assess impacts. “Most of that stuff is on the ground now.”
The remaining cotton higher in the plant will fare better because the bolls there haven’t been open as long, but likely with lower productivity and quality, he said.
Hardest Hit
Crops in eastern Georgia were the hardest hit with some growers facing total losses, while others are seeing 30% to 50% drops in production, Hand said. Some particularly sparse fields may not be harvested at all, as operating a cotton picker in that situation could damage machinery, he added.
The hurricane is compounding an already difficult year for cotton farmers, who are expected to see 2024 cash receipts fall 24% from the prior year on lower prices and sales volumes, the USDA forecast last month.
Farms are facing “huge losses,” with the potential for bankruptcies this year, said Wayne Boseman, president of the Carolinas Cotton Growers Cooperative. Growers in the region are concerned that wet weather will cause bolls to rot, he added.
A bipartisan group of legislators wrote a letter to Congress Monday asking for federal assistance to be made available as soon as possible to “prevent deep and lasting economic damage to the agricultural industry” in the Southeast.
Only a third of Georgia’s cotton — and half of North Carolina’s crop — were rated good or excellent in the week ending Sept. 29, according to the USDA. Those percentages were down 26% from the prior week. Crop conditions also worsened in Tennessee and Arkansas.
It wasn’t clear whether the data included a full assessment of the storm’s damage through Sunday. The USDA didn’t immediately respond to a request for comment.
Harvest Delays
Harvest, which usually starts in late summer or early fall, could also face delays as road closures and wet weather make it difficult to move and operate equipment. Egli said harvesting equipment won’t get into fields for at least two weeks.
Affected parts of Mississippi could be held up by about 10 days, with Georgia and Alabama seeing longer halts, said Walter Kunisch, a senior commodities strategist at Hilltop Securities Inc. Still, the national harvest is “off to a good start,” Kunisch said.
Also, crops have the potential to recover if the weather dries up, said Louis Barbera, managing partner at VLM Commodities.
“Cotton is very resilient, but this time of year it needs the sun to bleach the fiber and dry it,” Barbera said. “Cotton can and usually does come back, but as they say, sunlight is the best disinfectant.”
Cotton futures in New York were lower on Tuesday, after climbing more than 1% in the previous session.
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