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Stage Set for U.S. Cotton Acreage Revival

Today's 20-year low in U.S. cotton acreage, combined with changing priorities in competing cotton-growing nations, means that U.S. production is likely to expand in coming years, according to a new study.

"The U.S. cotton sector is likely to improve as major global cotton producers — such as China and India — increasingly divert more acreage into food production to keep pace with rising incomes and populations. This would likely raise the price of cotton and entice U.S. farmers to increase their cotton acreage," said Michael Whitehead, vp of Rabobank Food & Agribusiness Research and Advisory (FAR).

U.S. cotton acreage fell by almost 30% in 2007-08, to some 11 million acres — its lowest level in 20 years, the FAR reported in its new "U.S. Cotton" survey.

The forecast for the 2008-09 year shows that cotton acreage is forecast to continue falling, declining another 13% to just over 9.4 million acres — the lowest level since 1983.

But China, suggested FAR, may cut back on cotton acreage in favor of expanded cultivation of grain and oilseed crops.

Production in India, where cotton yield has been booming, is projected to slow down to a 5% growth in the coming year, FAR said.

Urbanization is another factor affecting land use in these rapidly developing countries, the study pointed out. Complete information on the U.S. Cotton study is available at Rabobank is a financial services company specializing in food and agriculture.

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