June 28, 2000

Mexico Cotton Crop Closely Tied to Reservoirs

Confirming an area loss that cotton industry experts have warned of all winter, FAS Mexico City recently estimated Mexican 2000/01 cotton area at 75,000 hectares, down 53 percent from 1999/2000. Production was estimated at 300 bales, down 52 percent from last year. Official USDA estimates of the 2000/01 Mexico cotton crop will be released on July 12, 2000. Several factors are cited for the area drop, including the relatively strong peso, insufficient governmental support, a tight credit environment, low domestic cotton prices competing with even cheaper imported cotton, and drier than normal weather conditions combined with low reservoir reserves. The comparatively high profit margin of wheat and vegetables is also believed to have pulled acreage away from cotton.

Traditionally, better than 80 percent of Mexico's annual production comes from the spring/summer season, with an even greater percent of that spring/summer crop irrigated via wells and reservoirs. With a few exceptions, low production in the 1990's reflected the fact that fewer hectares were devoted to irrigated cotton. Tamaulipas is the only state that reliably contributes dryland cotton. In years where summer production is low, Tamaulipas' percentage of national total is high; however in years of normal production the state seldom contributes more than 10 percent.

The major summer producing states are Baja California, Chihuhua, Coahuila, and Sonora, in the northernmost section of the country where irrigation is the norm. Thus, Mexican cotton production prospects are closely tied the status of its reservoirs, and the critical source for replenishing reservoirs in this region are May - October tropical storms. The El Nino/La Nina phenomena has not been a positive influence for Mexico during the late 1990's, and the storage level of Mexican reservoirs has been declining even as water demand water has risen.

Reservoir data from May 2000 indicated that overall reservoir levels were at 10 percent of capacity in the northwest, 30 percent of capacity in the north central, and 20 percent of capacity in the northeast. However, this season has begun with the promise of improved precipitation, as a powerful weather formation passing west-to-east over the United States last week siphoned off moisture from Hurricane Carlotta (which was churning north westward in the Pacific Ocean) and created showers across Mexico. Sinaloa, Durango, Chihuahua, and Coahuila were the main beneficiaries, but stronger activity of this type is required to return the reservoirs in the region to a comfortable level.

Daily high temperatures have remained in the optimal range of 91 to 97 degrees Fahrenheit, and when temperatures did rise above the destructive 102 degree threshold, the condition did not persist long enough to cause irreversible damage. An improvement in the well and reservoir status would be the best scenario for cotton stands, minimizing the threat of heat stress later in the summer. Still, cotton fields have been robust through mid-June, and the crop will continue to prosper for as long as the water lasts. The leading edge of the annual monsoon has historically come to north central Mexico in late June, but the late 1990s witnessed several delayed arrivals. This year's monsoon has been tracking at least a week behind the traditional pace, and any further slackening of the current pace may place cotton at risk.

For more information, contact Ron White with the Production Estimates and Crop Assessment Division on (202) 720-0137.