2002 Drought Update: USDA Reduces the Projected State Average Cotton Yield Once Again
Todd D. Davis, Hal M. Harris, Charles E. Curtis, and Russ Sutton

The latest USDA crop production report, released on December 10, has reduced the expected state-level cotton yield again to an estimated yield of 252 lbs/acre (Table 1).  Table 1 lists the yield projections from the August through December crop production reports.  Harvest yield information was not available for the August and September reports.  However, actual harvest yield data were incorporated in the October report and later crop production reports.  Once the harvest information was incorporated in the yield estimates, the projected cotton yield declined 27% from the September report, 18% from the October report, and 17% from the November crop production report (Table 1).  The yield estimates for corn, soybeans, peanuts and tobacco have been relatively stable since the September crop report.

Table 1.  Projected State Average Yield Estimates from the August, September, October, November and December Crop Production Reports.

	December Estimates 1/	November Estimates 2/	October Estimates 3/	September Estimates 4/	August Estimates 5/
Corn (Bushels/Acre)	--	35	35	35	42
Soybeans (Bushels/Acre)	--	17	18	18	18
Wheat (Bushels/Acre)	--	--	--	--	38
Cotton (Pounds/Acre)	252	302	369	503	504
Peanuts (Pounds/Acre)	--	2300	2,200	2,100	2,600
Tobacco (Pounds/Acre)	--	--	1,900	1,900	2,000
1/ National Agricultural Statistics Service. USDA.  Crop Production. CR PR 2-2. December 10, 2002. 2/ National Agricultural Statistics Service. USDA.  Crop Production. CR PR 2-2. November 12, 2002. 3/ National Agricultural Statistics Service. USDA.  Crop Production. CR PR 2-2. October 11, 2002. 4/ National Agricultural Statistics Service. USDA.  Crop Production. CR PR 2-2. September 12, 2002. 5/ National Agricultural Statistics Service. USDA.  Crop Production. CR PR 2-2. August 12, 2002.

The cash market prices and loan deficiency payments (LDP) used in valuing the cost of the drought are reported in Table 2.  Corn and soybean prices are above the loan rate for both commodities and do not generate loan deficiency payments.  In contrast, cotton and wheat have LDP’s of $0.152/bu. and $0.1618/lb., respectively (Table 2).  Peanuts also have a LDP of $0.0132/lb. (Table 2).  Tobacco does not have a commodity loan program, so there is not a LDP for tobacco.

Table 2.  Harvest Cash Prices and Loan Deficiency Payments Used in Calculating Value of Drought Loss.

	Harvest Cash Price	Harvest Loan Deficiency Payment 1/
Corn ($/bu.)	$2.60	$0.0000
Soybeans ($/bu.)	$5.30	$0.0000
Wheat ($/bu.)	$2.50	$0.1520
Cotton ($/lb.)	$0.47	$0.1618
Peanuts ($/lb.)	$0.1654	$0.0132
Tobacco ($/lb.)	$1.76	NA
1/ LDP calculated using loan rates of $2.18 for corn, $5.03 for soybeans, $2.45 for wheat, $0.52 for cotton, and $0.1768 for peanuts.

The updated preliminary estimates of the cost of the drought on the primary agronomic crops produced in South Carolina are reported in Table 3.  The total loss for the major agronomic crops is estimated to be $132.25 million (Table 3).  About 52 percent of the loss is from reduced cotton production and lost loan deficiency payments, and another 23 percent is from reduced corn production.  Reduced tobacco production accounts for another 13 percent of the total economic loss (Table 3). 

Table 3.  Value of Reduced Production for the Major Agronomic Crops Due to the 2002 Drought in South Carolina.

	Value of Reduced Production ($ Million) 1/	Value of Abandoned Acreage ($ Million) 2/	Value of Lost Loan Deficiency Payments ($million)3/	Total Loss ($Million)3/
Corn	$30.99	$0.00	$0.00	$30.99
Soybeans	11.96	0.00	0.00	11.96
Wheat	2.33	0.12	0.14	2.58
Cotton	49.93	1.34	17.14	68.41
Peanuts	0.63	0.00	0.05	0.68
Tobacco	17.62	0.00	0.00	17.62
Total	$113.47	$1.46	$17.33	$132.25
1/ Production loss relative to 10-year average yield.  2/ Production loss relative to 10-year average abandoned acreage. 3/ Value based on market prices at this writing.

This is a preliminary estimate and does not include all of the commodities produced in South Carolina.  The January crop report will provide the final yield and production estimates for the major agronomic crops as well as hay and forages.  The value of abandoned acreage for cotton will increase in the January report, as the December survey did not cover harvested acres.  As a result, the total loss for cotton is understated.  An estimate of the cost of the drought including livestock, fruits and vegetables, and forestry losses will be released as the information becomes available.